I recently received an offer to lease mineral rights that I own (1/32 on 320 acres) in Howard County, TX. This came as somewhat of a surprise, since I was not aware of owning any such rights, but some research revealed that I did actually inherit this back in 1986. The terms seemed reasonable, so I signed and sent back the lease forms.
Yesterday, I received the initial bonus check, along with two copies of a somewhat disturbing document titled "RELEASE AND/OR DAMAGE SETTLEMENT AGREEMENT". The text of the release statement is:
The undersigned represents the current owners of the lands described above; the receipt and sufficiency are hereby acknowledged; owner hereby releases, acquits and discharges Paladin Petroleum III, LLC and its successors and assigns from any and all damages resulting from the operation(s) described above. Owner agrees to account to any other party who may be entitled to receive any portion of the total sum above.
Is this a normal part of a mineral right lease? I can't find the specific text online anywhere, so this doesn't appear to be standard wording. And what I've read on the subject of mineral leasing indicates that a damage agreement is something that normally only applies to the surface owner, which I certainly am not. Frankly, this is making me very leery of cashing the bonus check, as I'm apparently being asked to effectively give them a blank check to cover any unspecified "damages" that might occur during drilling.
Even if I was convinced that this is something that I should sign, I'm not sure what I would do with the form afterwards. There were no instructions included, nor any return envelope - which of the four companies involved in the lease so far (operating company, leasehold owner, holding company, and the company the landman works for) would I send it back to?