Is there opportunity for greater gain @ 1% ownership with me investing funds vs. just collecting royalty at 18.75% plus the lease premium of $250/acre? Is Oklahoma & Texas the same in regard to this question?
Randy, How much do you know about the productive capability of your acres? Do you have offset wells nearby with known production? There can be great profit and the risk of losing all plus more than you thought you were investing, or you might get half of your money back over a period of 10 years, and if it works out and you get a profitable well, you stand to make 18.75% more per barrel for your oil than the operator does for his, because you don't have to pay anyone a royalty. You could make more than 400% as much as you would leased. 1% of a good well is no small thing but you should have more indication of what kind of well you think you will get before you decide to invest. Possibly you would be better off paying someone a royalty. Set up an LLC lease your acres to it and let the LLC participate. I would suggest legal help and a consultation with a CPA before making your decision.
Okla and texas are not the same.
In Texas you aren’t entitled to participate unless your minerals are under the drilliste tract or one penetrated by the wellbore. In Oklahoma you can do it, it’s just probably not a good idea.