We have 70 acres in Freestone County, Texas (Fairfield, Texas) and have been offered $400 an acre for mineral rights. Terms 3 years (3 year option at $600 per acre) and 20% royalty, does this sound fair.
Thanks,
V
Sounds like you’ve actually been made an offer to purchase an Oil and Gas Lease, not to purchase your mineral rights. An oil and gas lease grants the right to explore for and produce your minerals. The $400 is called the “bonus” for the first 3 years, called the primary term. Which means the Lessee (the company trying to buy your lease) will have 3 years within which to drill or explore under your property. The option to extend means if the Lessee chooses, he can pay you another $600 per acre before the first 3 years expires and he will get another 3 years to make an attempt. If production occurs, then you receive the 20% royalty from the production that is attributed to your acreage.
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Thank you, I really appreciate you!