Lease of mineral rights

My family as been offered a lease for 96 net mineral acres. Terms of lease include 40.00 per net mineral acre annual rental 200.00 per net mineral acre paid in advance for five years for a five year term and a proportional share of 1/6th royalty payable to the mineral holders of the future production. This is for are mineral rights on land in Fresno County, Ca. Is this a fair market value they are offering?


Has any drilling been done anywhere close to this property? Everything is in the oil co's favor, seems to me. $40.00 an acre is the lowest bonus I've ever seen. In the first place, I believe I would run, Flora, run ! If you have 96 acres you have a lot of leverage. Your royalty should be should be 20% minimum. You should talk to people if you know who they are that can tell you what the going price is in your area. You cannot do too much research when considering a lease. Talk to your family and ask questions. They may know something you don't. Anything I've said is apersonal opinion. I'm not a landman or an oil co. As an almost last resort, go to your bank and see if they have any info. I wish you the best at whatever you decide. : )

Wes Luke

Hey, Flora -

I am not familiar with the area, but can make some calls and pull up a little information for you.

Might help you to see things a little more clearly.

What is the legal description of the property?

Is this your first time to lease land?


Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

havent legal dscripton of property yet. yes is first time we lease the mineral rights. father-in-law did over 20 yrs. ago.

Ask the Landman to send you their proposed lease to consider. It will have the legal description in it.

Does your family own the surface? If so, who's name would it be under in the Tax Rolls?

i called the landman and he is sending description to me via-email today. we do not own the surface any longer. just the mineral rights.

Good first step! Send it when you can and I'll take a look.

Our legal description is:

The Southesat Quarter of Secton 32, Township 18 South, Range 16 East, M.D.B. & M.

APN 060-140-63 (Ptn.)

We do not know anything about whats going on in area, we have never done this before thank you for any help.

Atta' Girl!

I have a friend over this evening, but will take a look at the area tomorrow or Saturday and get back to you.


thank you for your help

Flora -

The link below will take you to an article on the Monterey Shale, which appears to be what the companies are all after in your area. Actually, all over Southern California.

It sounds exciting!

Also, you might want to look around on The Forum's Home Page and find the Fresno County Group and join it. I found the link somewhere, but don't remember where.

There does not appear to be any substantial drilling going on in your immediate area at present. And the only wells presently producing within 25 miles of your land in any direction are relatively shallow, low producers.

These wells do not appear to be producing from the Monterey Shale, however, so if and when development of the Monterey begins in the area, you may be in for some wonderful surprises.

As I understand your original posting, you have received an offer from one company to lease your lands for a 5 year Primary Term for a (Signing) Bonus of $200.00 per net mineral acre, with $40.00 per net mineral acre annual rentals (years 2 through 4).

I would suggest you negotiate for at least a 1/5 (20%) royalty or, if you can get it, a 1/4 (25%) royalty. Other than that, for what would be considered "Rank Wildcat" acreage here in Texas, the offer doesn't sound too bad.

There are several companies aggressively leasing in your area, however, not just the one. If you would like, I can provide you with their names and contact information - you may be able to get a better offer.

Either way, ask the company(ies) to send you over their proposed lease form and take it/them to an experienced oil and gas attorney to review before signing anything.

If you would like me to look it/them over as well, I will be happy to. I have several additional provisions you and/or your Attorney may want to consider adding before you sign.

One Question: Do you own the surface of the land? And, if so, what do you do with it?

Something else: You will more than likely be approached over the coming years by people wanting to purchase your mineral rights. Unless you have some important need for cash, such as family medical issues or college tuition to pay, I would advise that you do not sell them. And, if you do have an important need for an influx of cash, only sell a portion of them.

The real value is in the production which, once established, should last for many, many years.

Hope this helps -


Thank you for this information. I would welcome any information to forward to my attorney. I will look for the group.

thank you again


Charles recieved lease today in mail, they have changed things would you read it for me?

Sure thing!

Go to your personal page and I'll send you my email address.