Can any of my neighbors in Angelina County tell me what you have been offered per acre for a lease bonus, or the percent royalty? I have been contacted by a landman named James Dailey who states all my neighbors in Central and Pollok have already signed and he wants to lease the mineral rights on my 10 acres. I have never done this before and don’t know how to negotiate or what to expect. I would appreciate some information about your experiences. Thank you so much, Kay843
$500 lease; $5,000 sell
Don’t let the landman’s approach intimidate you. I’d ask him what he’s talking about and then try calling some of the neighbors he says have already signed. Also ask what company he is representing, and if he won’t say or it’s a no name LLC with no drilling record you may want to pass.
Don’t let him give you the rush act. Tell the landman to email you a written offer and the proposed lease agreement to consider, and then get someone familiar with leasing to look at it for you.
You’ve got a small tract but there are lots of lease provisions besides bonus and royalty that are negotiable. Try to keep the lease term as short as possible, don’t agree to an extension option, add special provisions including a pugh clause and no cost royalty, if you own the surface possibly require no surface use and make sure they agree to give you the check for the bonus before you give them the signed original of the lease.
I would say, if James Dailey is putting a sense of urgency on leasing you, and he has everything around you leased…its likely he is putting together a unit for an operator he is representing and you are one of the final pieces in the puzzle. As far as bonus goes…You might be able to get a little more out of it. The Purchase price is pretty solid though.
If you are selling, they are paying $8000 to $10,000 an acre to buy the mineral rights.
I just got a call from another landman, Terry Travathan, representing BP. Did you finalize your agreement? Do you mind if I ask where you ended up?
Mark, Thank you for your post. What are the terms being sought at this time? Three years, five?
Just received offer from British Petroleum & Landman from NACOGDOCHES. Offered $350/acre & 1/5 royalty for lease in Stanley Survey SE of Huntington. Later offered $500/acre. I know there is oil and lignite and no telling what other type of minerals and I’m not inclined to give away those for free. If they want the shale at 20,000 feet, that’s fine but I’ve been offered $500/acre for oil only on other tracts. Hard sell type of guy - only game in town and if I don’t accept, then I will never lease my land out.