# 3/16's rate too low **URL:** https://www.mineralrightsforum.com/t/3-16s-rate-too-low/5095 **Category:** Yoakum County, TX **Created:** [May 24, 2016, 6:59pm UTC](https://www.mineralrightsforum.com/t/3-16s-rate-too-low/5095 "2016-05-24T18:59:08Z") **Posts on this page:** 6 **Page:** 1
### Author: ![Lynda\_Farabee](https://www.mineralrightsforum.com/letter_avatar_proxy/v4/letter/l/6f9a4e/32.png) [@Lynda\_Farabee](https://www.mineralrightsforum.com/u/Lynda_Farabee) #### Post date: [May 24, 2016, 6:59pm UTC](https://www.mineralrightsforum.com/t/3-16s-rate-too-low/5095/1 "2016-05-24T18:59:08Z")
What is a representative of a good percentage then? I have been contacted about leasing Section 552 in Yoakum County. Based on this discussion, looks like all my offering is too low: 100 per NMA, 3/16’s, three years plus option of two ---
### Author: ![Wolfcamp\_Shale](https://www.mineralrightsforum.com/letter_avatar_proxy/v4/letter/w/3bc359/32.png) [@Wolfcamp\_Shale](https://www.mineralrightsforum.com/u/Wolfcamp_Shale) #### Post date: [May 24, 2016, 7:04pm UTC](https://www.mineralrightsforum.com/t/3-16s-rate-too-low/5095/2 "2016-05-24T19:04:33Z")
25% is standard. ---
### Author: ![Lynda\_Farabee](https://www.mineralrightsforum.com/letter_avatar_proxy/v4/letter/l/6f9a4e/32.png) [@Lynda\_Farabee](https://www.mineralrightsforum.com/u/Lynda_Farabee) #### Post date: [May 24, 2016, 7:08pm UTC](https://www.mineralrightsforum.com/t/3-16s-rate-too-low/5095/3 "2016-05-24T19:08:50Z")
Thanks! ---
### Author: ![William\_Douglas\_Archer](https://www.mineralrightsforum.com/user_avatar/www.mineralrightsforum.com/william_douglas_archer/32/3400_2.png) [@William\_Douglas\_Archer](https://www.mineralrightsforum.com/u/William_Douglas_Archer) #### Post date: [May 24, 2016, 7:11pm UTC](https://www.mineralrightsforum.com/t/3-16s-rate-too-low/5095/4 "2016-05-24T19:11:28Z")
I personally strive to always get a 1/4 cost free royalty. The lessee wants to keep it less, and oftentimes they keep an overriding royalty which is easier to get when landowner accepts less than a quarter. My suggestion is to make absolutely certain you have a cost free royalty. That is why you are giving them the far majority, anywhere from 75% to 87.5% of YOUR minerals. The option does nothing for you. It allows them to retain a ceiling on their cost. If market is less, they will not exercise, if it is more, they have a good hedge. ---
### Author: ![Lynda\_Farabee](https://www.mineralrightsforum.com/letter_avatar_proxy/v4/letter/l/6f9a4e/32.png) [@Lynda\_Farabee](https://www.mineralrightsforum.com/u/Lynda_Farabee) #### Post date: [May 24, 2016, 7:15pm UTC](https://www.mineralrightsforum.com/t/3-16s-rate-too-low/5095/5 "2016-05-24T19:15:38Z")
Appreciate the comment about the option portion. Glad to know about when they might/might not exercise the option. ---
### Author: ![system](https://www.mineralrightsforum.com/uploads/db5755/original/3X/6/c/6c7c56608c843272ad6e3662ce9562a5956f173e.png) [@system](https://www.mineralrightsforum.com/u/system) #### Post date: [August 14, 2018, 11:13pm UTC](https://www.mineralrightsforum.com/t/3-16s-rate-too-low/5095/6 "2018-08-14T23:13:09Z")