Looking for the opinion of someone other than the very distant relatives I have never met and the "Lessee" that calls me daily because he "cares"...
A few weeks ago I got a phone call from a man (Lessee) who told me that I had inherited mineral rights in Texas. He explained that I shared 640 mineral acres with several other people who are distant relatives. He told me to check my mailbox, find the lease he had mailed, meet a notary, sign, return in enclosed envelope and wait 2 days for my "substantial check" to arrive. Wow. Really? I wonder how often, if ever, that approach works for him?
I didn't sign... Still haven't. Apparently, I am the only "Lessor" who hasn't, all of the other "relatives" have already recieved their signing bonuses.
I don't know the people I share ownership with or why they signed so eagerly. I do know that I have recieved 2 "revised leases" and each new lease has a higher signing bonus. The latest offer is 3 times the amount of the original offer.. The phone calls have also become more frequent and the pressure to sign is getting old pretty fast.. It only makes me want to take more time to gain as much knowledge as possible.
What would happen if I took my sweet time? Considering how everyone else has signed, I doubt that I'm preventing the "Lessee" from moving forward. I am not in a hurry to collect my share of something I didn't even know existed a month ago.. At the same time I don't want to lose out because I lagged.
Has anyone out there been in a similar situation? Any information or opinion from any perspective would be greatly appreciated...
Chrisanne, you've come to the right place. If your part of the 640 acres is not leased yet, you can search out other people here whose mineral or royalty interests are situated near yours. You can follow instructions here on how to use the Texas Railroad Commission online interactive GIS map to find out about drilling permits and activity around yours. Here are a couple of links for you to do more research, including a tutorial on how to use the site:
Excellent Youtube Tutorial on GIS Map Viewer by Kreg Harrison, a member on this site:
Check around some of the previous threads here too. You will find a wealth of shared information from fellow mineral interest owners here. Much of that information includes people sharing what bonus rentals are being paid, plus what many others are negotiating as to royalty interests. I've seen 25% as a community norm, however there are exceptions. Also, a lawyer who normally represents mineral interest owners and who has familiarity with the oil formations and fields your prospective lessee is interested in can be very, very useful. This is because a good one will know what all of those lease clauses mean and can explain the implications of lease your operator-lessee wants you to sign.
How large is your interest (for example: "undivided interest of 1/50 of 640 acres") and where (Section, Block, Abstract), how many people are also part owners, how high is the bonus offered, how high the royalty, is there an option ("renewal for a further two years after the primary period")... lots of questions to answer before anyone can help you. If your interest is large, for example only 2-3 other owners in those 640 acres, you have good bargaining chips and can take time to inform yourself of the going rates and lease terms. If your interest is small, for example 1/50 of those 640 acres, you probably will not be able to bargain much and will have only a little room (or none at all) to negotiate lease terms. That's my experience as a small owner of undivided surface and mineral rights in Reese county.
It's a good sign that you're being called so frequently, and that the bonus keeps increasing. Perhaps that means you have a large interest. If so, check out the other threads in the Reese county section of this forum and see what others have had to say.
P.S. Someone who wants a lease will always claim you're the only one who hasn't signed. That could be true, but often is only intended to put pressure on you to sign without reading the terms.
I have a 10% mineral interest in the property. No surface rights. My portion of the bonus consideration is $15,000 (3 times the original offer), and the terms of lease are $1,500 per net mineral acre, with a 3 yr. lease, 1/4 royalty interest...
10% of 640ac = 64nma x $1500/ac = $96,000 and you're only being offered $15k ??
I'm no math wizard, but something ain't adding up!
25% is good royalty! - must be a hot spot! I'd centainly check around and see what activity is going on.
If 'everyvbody elsse' is already signed up, I'd ask for $5000 / acre, and see what they come back with..
.... and have them escrow the check at a local bank, for you to swap w/the signed papers. - no cold drafting'.
If you really do have some acres, I'd have somebody like Buddy Coton check the lease out
Chrisanne said:
I have a 10% mineral interest in the property. No surface rights. My portion of the bonus consideration is $15,000 (3 times the original offer), and the terms of lease are $1,500 per net mineral acre, with a 3 yr. lease, 1/4 royalty interest.
It's true, something wasn't adding up. So, I called and asked "Lessee" and he told me my offer letter had a mistake. He sent me a revised letter that now says I am the owner of 10 mineral acres. (Rather than the owner of 10% mineral interest of the referenced property) That is a pretty big mistake to make..
Also, all of this is only on the cover letter. The lease itself does not state anywhere what part of the property I own. It only says "This is a lease in gross and not by the acre and the bonus money paid shall be effective to cover all such lands irrespective of the of the number of acres they actually contained, and the lands included within the terms of this lease are estimated to comprise 640 acres, whether they actually comprise more or less."
oldoak said:
10% of 640ac = 64nma x $1500/ac = $96,000 and you're only being offered $15k ??
I'm no math wizard, but something ain't adding up!
25% is good royalty! - must be a hot spot! I'd centainly check around and see what activity is going on.
If 'everyvbody elsse' is already signed up, I'd ask for $5000 / acre, and see what they come back with..
.... and have them escrow the check at a local bank, for you to swap w/the signed papers. - no cold drafting'.
If you really do have some acres, I'd have somebody like Buddy Coton check the lease out
Chrisanne said:
I have a 10% mineral interest in the property. No surface rights. My portion of the bonus consideration is $15,000 (3 times the original offer), and the terms of lease are $1,500 per net mineral acre, with a 3 yr. lease, 1/4 royalty interest.
"This is a lease in gross and not by the acre and the bonus money paid shall be effective to cover all such lands irrespective of the of the number of acres they actually contained,..."
Only one thing to say about that: don't sign! Something's very fishy about this. If I were you, I'd call up the:
Reeves County tax office 432-445-5473 Pecos, Texas
and try to find out some details about your interest. You may get referred elsewhere, since if you only have the mineral interest and there is no production, you pay no tax and the tax office may not be able to help. But it's a good starting point. What you need is some precise information about what you actually own, and NOT from a prospective lessee who does not even specify the lease interest in the lease.
Chrisanne, If you already have $15k being offered/coming in, and you have no-clue as to what you actually own, it would behove you to get ahold of Buddy Cotten - http://www.mineralrightsforum.com/profile/BuddyCotten?xg_source=profiles_memberList - to look things over for you; the cost would be minimal, and will likely help prevent you from missing out on $10,000's of dollars from oil-co being so wishy-washy and elusive. Who knows, wells might have already been drilled and producing of millions of $$ of oil, if you've been hard for them to locate (which why they may be calling 'daily') - you might actually own a % of the well, which would be worth WAY more than the royalty %. If you're being offered $15k already, this is not something to continue to put off - get ahold of Buddy, and there is no way you can lose, you'll come out ahead . . . wait too long and oil-co may label you as 'impossible to negotiate with' and find a way to cut you out of the unit, and you lose everything.
Careful - checks like that often are to 'sell' your entire mineral rights over; no-one should be sending you a check till AFTER you have signed a decent (to you) lease. Don't sign anything till you are guaranteed a good valid check (escrow, if you are distant).
Sounds like someone is pushing very-hard to 'trick' you - sign your rights over for way less than they are worth.
Did you try to get ahold of Buddy? and hour or two of his time could save/make you $10,000 +
(for example, if your acres are really that good, he might be able to get you 3000/acre, or even 5000/acre - dont just throw that money away!)
We also own mineral rights on 5 acres in Reeves county, just northwest of Toyah. We own 100%. For 3 years Chesapeak Energy had a lease on the 5 acres but never drilled. They did not pay anywhere near what you have been offered. I would check out the company offering the lease. I have received serveral offers to buy but I'm not wanting to sell.