Live oak county top lease rates

Texas Mineral Rights Live Oak County, TX
1

I have been approached with an offer for an Oil and Gas Top Lease on some mineral rights that we own in Live Oak County (in a portion of the Sanger Ranch - T. Welch Survey – I have more specifics regarding the exact location, but this is a ballpark). I have never been sent an offer for a top lease, so I am not knowledgeable as to whether this is a fair offer. The details of the offer are: • $150 per net mineral acre bonus consideration (payable within 60 days of the date the existing “bottom” lease is released and filed of record) • 20.00% Oil and Gas Lease Royalty • Oil and Gas Top Lease Bonus- 10.00% of Bonus, as described above, payable on date of execution of Oil and Gas Top Lease • Oil and Gas Top Lease Term- 18 Months • Oil and Gas Lease Term- 3 Year Paid-Up Lease with 2 Year Option to Extend • $150.00 Per Net Mineral Acre Extension Bonus Consideration • All Depths

Thank you in advance for any advice that any of you can provide me.

2

Personally, I am not a fan of top leasing and will not do it. Other’s may have different opinions.

An Overview of Recurring and Related Issues Involving Top Leasing.pdf (210.2 KB)

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3

I got the same offer. Is this a scam?

4

LC, the Railroad Commission map shows several adjoining surveys called T. Welch, so it might make a difference which abstract your mineral interest is located in. But from what RRC’s records show it seems doubtful any of those shallow Sanger Heirs wells that were drilled back in the 90’s there are still producing. Some may not have been plugged but it seems doubtful they can be maintaining a lease that is past the primary term.

Before considering a top lease you might want to confirm your current lease is still active. Are you receiving royalty payments? If not you might want to contact the operator and ask for a release.

5

Top leasing is almost always a bad idea for Lessors (mineral owners). It essentially provides an option for another party IF/When a currently valid lease expires (which is often disputed or in question). Obviously these contracts are dependent upon the specific language used, but these effectively operate as an option with timing that is unknown among the parties.

Better is to simply understand and confirm when your present lease expires (and Best to have an actual release filed of record regarding that lease), then negotiate under free market conditions at that time.

6

I got he same exact offer from Buscadero Land Management on behalf of Hydrocarbon Operating.

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My offer has exactly the same terms as u describe. Probably the same company.

I have been approached with an offer for an Oil and Gas Top Lease on some mineral rights that we own in Live Oak County (in a portion of the Sanger Ranch - T. Welch Survey – I have more specifics regarding the exact location, but this is a ballpark). I have never been sent an offer for a top lease, so I am not knowledgeable as to whether this is a fair offer. The details of the offer are: • $150 per net mineral acre bonus consideration (payable within 60 days of the date the existing “bottom” lease is released and filed of record) • 20.00% Oil and Gas Lease Royalty • Oil and Gas Top Lease Bonus- 10.00% of Bonus, as described above, payable on date of execution of Oil and Gas Top Lease • Oil and Gas Top Lease Term- 18 Months • Oil and Gas Lease Term- 3 Year Paid-Up Lease with 2 Year Option to Extend • $150.00 Per Net Mineral Acre Extension Bonus Consideration • All Depths

Thank you in advance for any advice that any of you can provide me.