I know very little about all this if someone can give me a little advice

Texas Mineral Rights Dimmit County, TX
1

Let me start by saying… I know somewhere between very little and nothing about mineral rights, royalties, etc. I have been an investor in real estate and owned an ad agency and other things over the years.

With that said, I have for many years owned and have the deed to 10 acres mineral and mineral royalties in Dimmit County, Texas.

It has been drilled on before but nothing came of it. I was pretty much convinced after some research, around 1994, that it was pretty much worth less and filed it away.

I recently have received an offer, and after a few days of research on the Texas RR site and others, I think it is because of new technology that this 10 acres may have some value.

It is obvious that there is a lot of activity in the area.

I took the offer to my attorney the day I received it, but have not heard back yet. So in the meantime I’m just trying to find out what I can. I also sent it to a high school friend that is in the oil business in Texas but have not heard back from him either.

Without going over the paid-up oil and gas lease they sent me in total, which is long and nothing like real estate leases I know about, but just by giving the general info from the cover letter, I’m wondering if anything can be known? From what I can tell so far it seems to be ok. Thanks.

The offer is:

500.00 per net mineral acre for primary and 250. per net mineral acre for option

Term is 3 years with a 2 year option paid up

Royalty 20%

Or bonus 250. primary and 250. per net for the option

Royalty of 22.5 percent

Thanks for anything you can tell me with this little bit of info.

2

Dan, If you can tell us the Abstract, Section and Block # we can check for activity and production in the area. Location can make a difference with minerals just like real estate.

Thanks, Clint Liles

3

I have gone to the Texas RR site and to the GIS finder and checked the production of the wells in the area and the permits and so on around the 10 acres and it seems to be very active.

4

Thanks for responding.

I’m still learning how to get around this site to respond even, let alone learning a little about this business.

… Survey No. 7 H&GN Railroad Company, Abstract No. 125 in Dimmit County, also I’m wondering about if they use water from your area, should you be paid for that? And if so, at what rate is applicable in that area.

Thanks again, Dan

5

I have a comparable offer to yours for a small interest my brothers and I inherited, and like you, I don’t have much information or background to evaluate the offer. The only difference between my offer and yours is that the bonus on the 22.5% royalty is $350, not $250. There is also a third option of 25% royalty and $250 bonus. What did you decide to do?

6

Three years ago with the help of an oil/gas attorney, we negotiated in Dimmit County:

25% bonus

$25,000 lease for 3 years, started in 2014

However, because of the global oil glut, companies might be offering less.