Hello everyone. Greetings from the suburbs of Philadelphia, where I came across this forum and need your help to determine if a mineral lease proposal from BP America is something I should sign off on.
I recently inherited 25 acres in Nacogdoches County, Texas. I am being approached by a Petroleum Landman whose client, BP America, wishes to lease certain mineral interest on the land I own. BP is acquiring acreage to drill and not to barter to a third party. I have absolutely no knowledge of this issue and am turning to you guys as the experts to help me through this if you wish to respond. Thank you in advance.
The proposal is as follows, as far as I can tell in reading the proposed lease:
Offer of a bonus amount equal to $350 per net mineral acre for a three year paid up primary term with a two year option at the same price.
Offer of a royalty burden of 1/5ths.
The landman's cover letter indicates the client might be willing to negotiate.
The questions I have (and I am sure there are other questions I should ask but am not sure as I am a neophyte on this issue) are as follows:
Is this a fair offer?
Should I consider negotiating on the per acre amount or on the 1/5ths in royalties?
Is it worth it to get an attorney to review the lease, or not economically feasible given the potential totality of the offer?
Is there a website or a place I can call that can tell me about the credibility of the landman who is making this proposal?
Does the fact that BP, a well known company is the client make this deal more reputable or enhances the possible ultimate payout?
I have no idea where this land is- are there any resources that I can use to pinpoint exactly where the land is?
As to the 1/5ths royalty offer, is it assumed BP would be paying all of the drilling expenses to get the oil or gas out?
How would the royalty offer calculated?
Is there anything else in the lease I need to get feedback on?
I really appreciate any responses to these questions. Thanks again.