Confusion over signing bonus

This is all new to me also. I am confused, is the $100/acre for leasing the land and then you get a bonus over and above that amount? If so, what is the typical bonus, it is a one time thing? If the lease is for 3 years do you get the lease amount each year?


I see that you're in Bakersfield. I am, too. There typically are no bonuses paid in California. I am not certain why this is. The amount that is paid is typically just the first year's rent, assuming that it is not a "paid-up" lease, meaning that the oil company has agreed to prepay the rents for the full three year term.

If they have not agreed to a paid-up lease, you will receive the rents annually. Remember, rents are paid on the net acreage that you own and not the gross acreage of the lease. Hope this helps.

Thank you. I am in Bakersfield, but the land I have mineral rights to is in Texas.


The lease bonus is received in exchange of signing the lease. It us usually paid once for "Paid up Leae"

Do some additional research on MRF and you will find that most leases today are not good for the mineral owner and contain control issues you may not be willing to give up. The bonus amounts offered are not competitive in most cases, and the payment of the bonus by a bank draft is not a good wy to go. Exchange the signed lease for a check or bank TRANSFER to your account. Make sure the royalty rate is competitive by joining the Texas county group on MRF and asking for help. Other members are very willing to tell you what they are being offered for royalty rate and perhps current bonus amounts.

Hopefully you can confirm the net mineral acres the leasing company is willing to pay for from family records such as deeds, wills, probates, etc.

If you have less than 10 net mineral acres, and a well hasn't been drilled on your land, it won't make much difference in the long run but if you have 40 net mineral acres or more, you should seek some help. Folks here are generous with information if you will supply your legal location in a request. That information allows them to apply their expertise to your specific area. Education is key.

Thank you so much. I really appreciate this forum and the wisdom it holds.


What County in Texas are your minerals located in? What is the Abstract #, Block# and Section #? How many acres of minerals do you have? You might want to join the County group your minerals are located in and post the question of how much the bonus rate is going for in that County. And don't ever take the 1st offer from the oil/gas company. It will more than likely be a low ball offer.

Clint Liles


My mineral rights are in Walker County. I am not sure of the abstract # etc but I am working on getting that, I know that holds the key to alot of information. I have 104 acres. This acreage is divided between family members, would each family member get a bonus plus the annual lease amount?


Each family member that holds an interest will get a separate lease to sign and bonus monies. I've never heard of 'annual lease amounts' being paid. That would be nice also.

Clint Liles

The bonus consideration is what is offered in exchange for your signature on the Oil and Gas Lease. Typically, it is "paid up," meaning that the lease payments are consolidated into one lump-sum payment when you sign the lease, instead of being paid annually. If so, the wording of the lease should say so somewhere. On the other hand, you could have a lease that is not paid-up, but those are extremely rare, and most land professionals would not advise that you sign one.

So $100/acre probably IS the bonus, and I say probably because that seems like an extremely low amount for virtually any part of Texas. It must be $100/acre for just YOUR portion of the minerals, not including the other family members' portions. That would make more sense. In other words, if you and three other family members each own equal amounts and you yourself get $100/acre then the amount paid to all mineral owners would be $400/acre, which is the more appropriate number to quote. In other words, it is more appropriate to say, "I got paid $400/acre for my 1/4 interest" instead of "I got paid $100/acre." Semantics, I know.

Dear Mrs Gilman,

The high end on bonus rates in Walker County, Texas are about $550 per net mineral for a 3 year paid up lease that provides for a 20% royalty. Paid up means the annual rentals are included in the original bonus amount and few other payments could be

due depending on the lease form that you negotiate.