Hemphill County Lease

My sisters and I hold mineral rights in Hemphill County which have been leased before.

We are now being approached by a landman proposing to renew/extend an expiring three year lease, with a bonus of $500.00 per acre, and a royalty of 1/5 of the oil and gas produced. How can I find out if this is a fair deal in the area? Is there somewhere I can look up the other leases in the area?

Also, should I be concerned that the documents arrived in a plain handwritten envelope from the Landman? And no copy of the original lease attached? I have asked him to send a copy of the original lease.

Thanks for any info!!

Depends on where you are in the county. However, $1000 and up on the bonus. Royalty depends on how heavy the gas play is. Would suggest starting at 25% for oil and NGL, and 20% on dry gas.

Where in the county are your minerals located? It seems as if the current hot spot is on a line from Canadian southeast into Wheeler County and then into Roger Mills County, Oklahoma. Also, there seems to be some drilling around Canadian.

My family's property is located in the southwest of Hemphill County and across into Roberts County. About four and half years ago, we leased to a landsman who then resold the lease to another company that again resold the lease.

That tells me that we didn't ask enough for the signing bonus.

But we found out who the landsman was working for, and it was a company that puts deals together and proves up the wells and then sells the project. That is their business model. They were just fluffing a package for resale.

We were pretty sure they would not drill our properties, so we leased to them. But if you have minerals, sometimes it is better not to lease, especially when the price of the product is real low. The price of natural gas is coming up some, but is nowhere near the price of the product overseas.

Whatever you do, make sure the contract is prepared by a competent oil and gas lawyer. That would be the one paid by you, not the oil company.

We figure it will eventually happen for us, if not us, our kids or grandkids. Hopefully, it will happen when a better tax situation prevails. Until then, we can wait.