I just found out I have 3 acres of mineral rights at NW/4 of section 277, Block D, John H. Gibson survey, A-175, Yoakum County, Texas.
I received a call from a landman who is offering me a lease bonus of $500 per acre for a 3-year lease (I assume this means it’s $500 total per acre per 3 year period, not $500 per year for three years - can someone confirm?), plus 1/5th royalties.
I’m trying to find out if this is a reasonable offer, can anyone give me some insight, or point me in the right direction? I really don’t know where to begin.
You should confirm it with the Landman, but usually the bonus of $500/net mineral acre is a one time payment on the front end, either paid by check or by bank draft subject to approval of title. The lease has a primary term (in your case 3 years), and a secondary term, which is as long as a well on the lease, or on lands pooled with the lease, has production of oil/gas in paying quantities. Look out that the lease may contain an option to extend the primary term by the operator making another payment to you. Be sure you want to lease the property for the amounts offered for both the primary term and any extension thereof. The royalty is usually a percentage of the proceeds received by the operator for the production saved and sold from the lease and should bear no costs.
I am doing research in Yoakum County now for a mineral owner client, and that offer is consistent with what is being offered in the area, but the actual location of your mineral interests will dictate the value (proximity to production, operator plans for the area, etc.).
