Block 76 - Sections 25, 26 - Loving County

Offered $2,600 per net mineral acre - but I have less than one net mineral acre. Any idea if this is a fair amount? From Pernim(?) Development. thanks.

That does not seem like an unfair bonus, but is it a fair lease?

To sell or lease?

I have a $2000/net mineral acre and equal 1/4 part royalty for this exact same tract. I know little about this area. I own only 1 acre. The rights were bought in 1940 by my great grandfather and passed through my Mom to me. Have lease in hand , but trying to do my due diligence before signing. Can anyone shed some light for me?

Much appreciated!!


If you blocked personal details and shared the lease, others on this forum could surely assist.

Please read this post before proceeding:

What exactly does your lease say regarding royalty?

Let me scan some of it.

I did read your link. My lease states this: As Royalty " the equal ONE -QUARTER (1/4) part of all oil produced and saved by the Lessee from the leased premises.

The company is Billiton.

Here is some of the lease.


1008-img031.pdf (1 MB)

I am not an attorney or as experienced as others on this forum. Why is it in your interest to sign a lease which confers interests in adjacent and contiguous properties?Why is it in your interest to give up the "other minerals" under your property? Why is this not strictly an "oil and gas" lease? If the Lessee wants to mine potash, sulfur, or uranium at a later date, let the Lessee present another lease and bonus. Could the deductions you would be agreeing to in treating the oil produced effectively reduce your royalty by a large percentage? It will be interesting to see if the landmen and lawyers on this forum will expand on the above and also pooling clause, etc. With <1 acre, I don't know how much bargaining power you have or how much energy/capital you are willing to spend to make a lease written to benefit the producer more favorable to you.

Being a medical person, I am completely in the dark with this. I appreciate your comments greatly. It's making me think.

I hope some others chime in too.


You are welcome. I have read others opine that a lease with deductions could effectively reduce a royalty from a 25% to 18.75%. There is a leasing help section of this forum: You might phone an Oil and Gas attorney and find out how much a consultation would be. A couple hundred dollars spent now on a friendlier lease might return ten times that over time. The other side--risk-- is that if you get too pushy, they might not lease your minerals. That is where some more seasoned advice could be very helpful.

On the basic bonus $2000 reasonable? Heck, when I leased in the DFW area within my "neighborhood" (1/8 acre lot)....we were getting $19000 per acre! back a few years ago!!

Have you spoken with a landman or did you only receive a letter in the mail? I would have concerns about the lease for reasons mentioned earlier.

Please follow the links "success based commission":

I have spoken to Exploration Land Services LLC. They are the ones doing the lease.

You likely now see that lease you are being "sold" is perhaps not something you should buy without modifications. Unfortunately, without being conversant in oil and gas law, it is highly unlikely one could be sure what the lease wording means. I would want an oil and gas lease with no deductions, not an oil, gas, and other minerals with deductions. It might be beneficial to contact Buddy Cotten and Wade Caldwell on this forum, as well as Caple Royalty and see how much each would charge to advise and/or negotiate for you. Then run the numbers and determine if expert advice would pay out in the end.

So, here is my next question. Have agreed to sell my mineral rights (less than 1 mineral acre in this block). When I received the papers to sign, it included a "conditional draft". "On drawee's approval and acceptance of title to the interest described herein, not later than 30 banking days after arrival of this draft at collecting bank...." etc. I have never seen this before. So I sign the papers, send them back, and then what? It's with JD Minerals, and bank is East Texas National Bank. I thought I would sign the papers, and after a certain time, get a cashier's or some other kind of direct check in mail ?? thanks


I'm an oil and gas attorney. If you'd like to discuss, I'm happy to help out a bit with no charge. This lease is terrible and I wouldn't sign it. Sent you a friend request.

Drafts were used extensively in the past (and still are to some degree) by leasing companies who wanted to get a party under contract before checking and verifying title. I tell most of my clients to require either a signed purchase and sell agreement with a closing date (like a real estate transaction) or hard money up front before signing a deed. Sent you a PM.