I was recently approached by Drake regarding a lease for mineral rights I inherited and this is my first time dealing with this. At what point would you recommend getting a law firm involved to look over things? I feel with the amount I own it might not be financially beneficial for me to get a firm involved but at the same time I don’t want to be taken advantage of.
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It depends upon a lot of things. The location within the County, Survey and Abstract number, the number of Net. Mineral Acres you own. A law firm that deals with oil and gas leasing a lot. No local law firms in Houston County are qualified. In a lot of cases you might can not afford to not use a good law firm. Good Luck
You can get quite a bit done at the start. Make them define the royalty percentage, bonus amount per acre, and the term of the OGL. Let them know you want them to provide an OGL that include a horizontal and vertical Pugh clause as well as a no cost royalty clause. Tell them to strike the warranty provision. Finally let them know you will most likely provide a copy of the OGL to your attorney for final review. You want them to prepare the OGL since that will save you time in negotiation. It is easier for an attorney to review a document then produce one from scratch.
With all that said, you are not a professional and will not know if these changes they present are favorable to your interest. Get a review by a professional you can trust. Good luck
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If a mineral owner is approached about leasing it is a good idea to ask the Name of the landman, his broker’s name, the company name, their phone #'s both office & cell, their email addresses and the brokers mailing address & request that they send you a copy by email of the proposed lease terms.
What did Drake offer? Still low balling?
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Three-year Lease, with Three-year option to extend 18.75% Royalty Bonus Payment of $350.00 per Net Mineral Acre
Drake made me the same verbal offer just today. I’m still waiting on the survey and abstract number, and also waiting on a written offer before sending it to my attorney (I’m very fortunate to have an oil and gas attorney in the family) I’ll share what I learn.
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I got the same offer from Drake yesterday. From what I am told they have a large buy area. I am not sure the offers will get much better until their is competition arrives or they get to drilling and are forced to pay more. Do we know the company for whom Drake is buying?
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Drake recently offered one big mineral owner $500 per acre bonus North of Latexo. Then offered the next door neighbor $200 per acre bonus.