Lease bonus in smith county, tx

I just inherited several oil and gas deeds from my father, so I am new to this. I have a current lease offer for a 20 acre tract out of Section 22 of the Thomas Quevedo Survey, A-18, Smith County, Texas. The offer is $300per net mineral acre, 3 year lease with 2 year option, and 3/16ths royalty. I am wondering if this is a good offer?

Welcome to the forum.

Cannot comment directly on that county, but most experienced folks in Texas prefer a 25% royalty and only a three year lease with no option to extend. If you have not leased before, it would be very wise to get a good oil and gas attorney to review any draft leases. The drafts are rarely in the mineral owner’s favor and need significant edits. An investment in good advice up front can reap better royalties if the well(s) are successful. The Directories tab above has several good Texas attorneys.

This might help. Our extended family signed a lease within the last 12 months in NW Burleson Co., just next to Smith Co. We knew the driller somewhat, plus the deal was complicated (35 owners), so we were more flexible than we might have been ordinarily. But, we did get 25% royalty and a $200 per net acre bonus and a $400 per net acre spud fee in the deal. So in essence, it’s a $600 per acre bonus, more or less. Spud fee must be paid before they spud their first well. It was 3 years, and we did give a 2 year option. Good luck.

1 Like

Thank you. that is helpful. I did counter with $500/net mineral acre and 20% gross royalty. I am waiting to hear their response.

Thank you. I did get a copy of a lease from an oil and gas attorney. And I countered with $500/net mineral acre and 20% gross royalty. I am waiting to hear their response. I will look into one of the attorneys from the directory. I live in AZ and did contact several here but with no response. So, thank you for that advice.

@SBowyer You will need a Texas Attorney who knows oil and gas law for TX. An AZ attorney will not.


Id be cautious of the strong counter. In this area they’re drilling small horizontal units and your 20 acre tract can easily be left out.

1 Like