Recently, I became aware that I own the rights to approx—10 net mineral acres located near the Hitts Lake area of Smith County. These acres are not located in the area of current production in Hitts Lake, but are nearby. I do have the abstract and lott information. A landman contacted me and now, of course, I have questions. There is a lease offer on the table and an offer to buy the rights. What are the questions I need to ask? What do I need to research regarding the surrounding area? Any information will be much appreciated. Thanks!
If a landman is offering to buy your minerals there is a good possibility that he knows that a well is possibly going to be drilled in that location/area. There are some Paluxy(formation) wells that have been producing in that area for 30-40 years and still producing. The majority of the wells in this area are vertical wells. Unless you are in dire need for the money I would think about leasing or if you do need money you could possibly sell half of your mineral rights and keep some.
I would suspect the lease bonus in that area would range from $150-$300 per acre…and 20%, 22.5% or 25% royalty…and negotiate if you think you want to lease.
Valence Operating seems to be the main producer in the Hitts Lake Field.
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Thank you so much for the reply! I expect to speak with another landman in Smith County soon. Your info is very helpful. Also, I need to get up to speed on mineral lease contracts. I know I will need professional help, but I’m looking for a good, written resource so I can at least have an informed conversation. Do you have any suggestions? Thanks!
At the top of this page click the Mineral Help section and you’ll find several articles that will help you with the basics.
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Much thanks! I will look at that section.
You can also go to the University of Texas and Texas A&M sites and read their lease contracts to get a feel for what really good lawyers put into their leases. Get an attorney to review any lease you receive. Do not attempt to cobble one together for yourself. One wrong word can cause all sorts of trouble.
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Thanks for that tip! I come from a family of Aggies, I should have thought of that.
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