1 mineral acre

Oil and Gas Leasing Help
1

A petroleum landman in East Texas has reached out to my family about some small mineral acreage we own. I personally only have about one mineral acre which I had totally forgot about until he contacted me, it is in close proximity to an active productive well in East Texas. They have future plans to drill a horizontal well that will include our track of land.

He has reached out to me and other family members sent contracts for the lease and a sign on bonus.

It’s my understanding the royalty in East Texas is a standard 1/5 rate?

How do you determine sign on bonus? how negotiable is this? Would this land man have competition also trying to acquire the same lease?

2

There is NO standard royalty rate in Texas. It’s negotiable, a 1/4 royalty for no longer than a 3 year lease and NO option term.

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3

Competition? You won’t know unless another landman contacts you. All of the terms of the lease are negotiable to a point. On the royalty, you can negotiate for anything between the 20% offer up to 25%. Lease bonus is all about location, location, location for the most part. The “sign on bonus” is what he offers. Then you take that offer and attempt to negotiate for a better offer.