We have received an offer to lease minerals in Fannin County. The offer was for 1/8th royalty, $150 per acre bonus, 5 year primary term with a 2 year option. Nothing about Pugh clause, depth clause, etc. Is this the best we can hope for?
This would seem to be a very minor proposal. Research the property on the TX RRC website for activity. Patience and research generally provides a better financial decision.
Welcome to the forum.
Depending upon the geology, most folks in TX would prefer a 20-25% lease for three years with no option. Some areas may not warrant that high. Most clauses in the lease are negotiable.
I have owned unleased minerals in Fannin for about 15 years, and as the map shows, there is no production there, the last lease (according to Drilling Info) was recorded about 2 years ago. It is currently an oil and gas wasteland. I would ask for 20%, but expect to get a royalty rate of 1/6 or 3/16. Unfortunately, this is not 20-25% land.
