Just received an offer to lease some mineral rights purchased by my grandfather and was looking for information. The offer is for a 5 year lease with a $50 per acre bonus and 1.5% royalty if there are any returns. We do not own the land. Have no idea what this is or if it is fair. The area is DAVID WILSON SURVEY, A-1085, being the same land described in Deed dated February 11, 1963 from Rueben M. Aaron et al to The Veterans’ Land Board recorded in Volume 1072, Page 389 Deed Records of Smith County, Texas. Help, what are the next steps. Want to make sure that I ask the right questions and do what’s best for all the cousins…
If for oil and gas then 1.5% is a joke.
Sorry it is 1/6th or 16.7%
The nearest production I find is to the S/SW about 5 miles…older oil wells that have been producing for years and years. 20%…22.5%…25% is the norm for Texas now. And $50 per acre is an insult even though there is no production or activity nearby.
[[[Counter offer at $250 per acre and 1/5 or 20% royalty]]] & NEGOTIATE(as Buddy Cotten would say)
This person that sent you this offer is possibly now also going to try to buy you minerals for chicken feed. My answer is don’t take the bait. At this time I don’t have any idea what producer/oil company would be thinking of drilling in this area. I check the Smith County Lease Alert fairly closely and don’t remember any leasing in this area of Smith County(I live in Smith County).
This GIS(Geographic Information Survey)map will show you where your A-1085/Section 1110 is located…
CLICK ON MAP TO ENLARGE
Thank you so much for the information. I will move in that direction. I had the sense that I was being lowballed. But that is standard I’m sure. I really appreciate the help.