Hello,
I own a small property (0,25arcres) in Arlington, TX, and it seems that they are going to drill in that area for gas. Several landmen contacted my neighbors and me to lease the mineral rights. The offers consits of a signing bonus and around 25% royalities. Most of my neighbots have leased there mineral rights to one or another company. Does anyone nows what happens if I do not lease my mineral rights? Do I get 100% royalities or do I get nothing?
Thanks
Peter
NOT LEGAL ADVICE
Dear Mr. Knispel,
I am not certain because I do not lease subdivisions. My belief is that if the producer or producers can lease at least 80% of the mineral rights within the proposed drilling unit, then they can proceed drilling the well without leasing the remaining 20%.
Of the 20% who never end up leasing, they are treated as “working interest” owners and paid 100% royalties on their pro rata portions of the well only AFTER the well is paid for, which could take a few months or a few years, depending upon a whole host of variables that are impossible to predict. So you get nothing for a while, then you get everything. Double-check with some of the other commentators.
Sincerely,
Philip Wynne
Thank you! That helps!
Peter
Philip Wynne said:
NOT LEGAL ADVICE
Dear Mr. Knispel,
I am not certain because I do not lease subdivisions. My belief is that if the producer or producers can lease at least 80% of the mineral rights within the proposed drilling unit, then they can proceed drilling the well without leasing the remaining 20%.
Of the 20% who never end up leasing, they are treated as “working interest” owners and paid 100% royalties on their pro rata portions of the well only AFTER the well is paid for, which could take a few months or a few years, depending upon a whole host of variables that are impossible to predict. So you get nothing for a while, then you get everything. Double-check with some of the other commentators.
Sincerely,
Philip Wynne