Hello, I am very new to ownership of mineral rights. I have rights in Freestone and Leon counties in tx. Lately I have been receiving alot of correspondence offering to purchase, lease, etc. My question is that when negotiating the Lease Bonus amount per net mineral acre what happens if I don’t agree to a bonus amount? Do they not drill? Do the funds go somewhere else. Just trying to understand what leverage I have in negotiations. Thank you!
Ryan
If you don’t ask, you are not going to get it. You don’t know that you are going to get the bonus money until it clears your bank. Don’t sign a lease without a Cashiers Check at the time you sign. Just like a real estate deal.
Your leverage depends on your fractional interest in the minerals and the size of the tract. For example, if you own 100% of 100 acres then you have complete control. If you own 1/100th of 100 acres = 1 net mineral acre then you have no real control. They can lease the rest and you will be unleased minerals in the well. If you own 100% of 5 acres in the middle of a planned unit, then you will have more leverage for better lease terms as wellbores have to be set back from your tract. If you own 50% of 5 acres and the other owners lease, then again you can be carried as an unleased mineral owner who comes in after payout. It is not just the bonus, the real issue are the lease terms such as royalty rate and costs. Lots of discussion on this site.
Thank you for your response, very helpful!