Approached for a Lease - East Central part of County

I have been approached by Pioneer for a lease. We are at $500/acre and 1/5th royalty. Is that a fair offer?


I find the Lease form that Pioneer uses in some parts of Texas too one sided. It renders the royalty highly compromised. The bonus payment is about all you can count on receiving if they are asking for more than 2 years or 3 at the most and only that when you have it tin the bank. The bonus amount they offer is what they think it will take to get your signature on their lease. The bonus they will pay depends on your exact location, their geologists concept of production potential, number of acres to be committed, competition, production in the immediate area, new discoveries and completions, and availability of drill rigs. At the end of the day it should boil down to what you want and need to forfeit control when compared to what your educated evaluation of their needs may be. Mineral ownership is not a retail business. Only you can set the price you think is fair for your needs and protection under the lease.

I saw $600 an acre bonus recently in Midland County. Is the 1/5 royalty tax free and expense free or are some costs deducted? The lease should state this but you may have to hunt for it.

I just saw $3000 an acre and 1/8 royalty offered by BTA for a lease near a drilling project they were starting. I guess it just depends on how bad they want it.