I have been contacted by a Landman about some inherited mineral rights. The proposed lease requires payment to me 120 days after execution. While I have limited experience in the petroleum and gas industry, this seems like an excessive term for payment. I am curious if this is industry standard…..or not.
The leasing company needs to check the title. The 120 days could be calendar days (4 months) or business days (6 months). Savvy mineral owners would not turn over a signed lease without getting paid! A reasonable course of action would be to get your attorney (highly recommend an attorney to review any draft lease) to hold the signed lease at their office until payment is received. You can send the agent a copy of the signed lease with big black marker striking every page with COPY DO NOT FILE (especially over the signature) so that your good faith is evidenced. Send a cover letter explaining who is holding the lease until payment is received.
If you are in OK, you have a pooling option which has its own benefits instead of leasing.