IS the royalty in East Texas (Cass) a standard 1/5 rate? How negotiable is this ?
How do you determine sign on bonus? how negotiable is this?
Does the land man have competition also trying to acquire the same lease?
There is not a standard royalty. The royalty is negotiable, but a 1/4 if usually the highest possible. The “sign on bonus” is offered by the landman. You will not know if there is competition until someone else appears and makes you an offer.
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Stupid Question Here. What is the incentive to reach out to all mineral owners? If someone says no they still go after the oil.
Virtually all the leases we have negotiated are 1/4 royalty. Just as important is the lease form. If you don’t have a royalty owner friendly form join TLMA and use their form.
Hello very newbie here, I appreciate everyones advice and time. I am in Lincoln, Nebraska and my mineral rights are in Monongalia, county WV. I received them through inheritance from my grandmothers passing. She received them through her husbands passing. So that would make me third generation holder of said mineral rights. I am not sure if I am the rightful owner or really how any of this works.
Believe you have another post on this matter. Everything is negotiable as long as theres multiple parties involved. Since you only have 1 acre, it doesnt leave you in a position to have much if any leverage. One can only determine the bonus offers based off whatever offers they are getting at the time, its not set in stone. For example, if someone owns 100 acres in a hot area, they are going to get much better offers than the person that owns 1 acre in the same section, as the 100 acres could decide whom operates the well.
The incentive to the explorer (operator) to reach out to all the mineral owners inside his prospect is two fold.
- In most states, at least 50% of the proposed unit needs to be under lease to meet pooling regulations.
- The lease is the grant from the mineral owner to the explorer (operator) to explore for the mineral owner’s minerals. On a single tract of land, without the lease the operator does not have the right to drill. On multiple tracts, the operator only has the right to drill when he has the minimum percentage of owners leased to create a pooled unit.
These are the very basics. There is more to the incentive from the perspective of how much un-leased acres make the prospect not profitable. But that issue is too complex for this platform.
If they only need to have 50% what happens to the rest?
There are several of us family members who have equal 1 acre interest Should we be trying negotiate as a family even if we only have small individual acreage?
They join in the well, its just not theirs to drill/operate. Ill just be honest with you, even if you get 5 more family members to join you, 6 acres total doesnt leave you with much if any power to negotiate especially when you add 5 more parties into the mix as operators will simply save the time and money to move on to larger interests. Your acreage does set up perfectly for small non-op companies, so Id sit tight until the smaller companies start calling you and play ball with them as they generally are easier to work with and more flexible on their terms.
Joint negotiations can be helpful financially, but can also be like herding cats.
What is a standard time length of lease?
@Michael52 there are a lot of ways to determine mineral ownership. It sounds like you would own them through heirship which would follow west virginias laws for succession. Were you named in the last will and testament from your grandmother? Was she named in the will from her late husband? If there is a direct paper trail it is much easier to track. If not, it can still be determined by heirship and heirship affidavits. Determining ownership, location, and any activity would be pretty high up on my list of priorities which can be done by a landman in WV pretty quickly. Are companies approaching you about these minerals?
Standard lease time varies by area and competition. Most of the leases in many states are a three year lease, but some areas have five years as more common.