I’m in the process of purchasing a parcel in the southern ute reserve, near Ignacio, where Red Willow is currently active. Purchase and sale agreement has been signed.
The previous owner has a lease agreement with red willow for compensation of $1200 a year, no end date on the lease. I’m no oil expert, but I know that that’s way too low for compensation. No royalties have even been determined in the past.
My question is, once I acquire the parcel, how likely is it that I can any type of royalty agreement/will I have a right to any?
Also, how do I know if the current owner even owns the mineral/subsurface rights? I called county and they have no record of a separation in the past.
Any advice is appreciated.