We have been contacted to sing a lease for oil gas and mineral rights in Williamson county. How do I find out what the going rate is for the signing bonus and the royalty,
Suzi Bird
I received an offer last week. Our minerals are in the NW area of the county. I was contacted by Diamond Resources, representing Petro-Hunt. Is this where you are located? I understand the drilling is moving that direction and am wondering if I received a good offer and if other drillers are buying up leases in that area.
We are located in Thrall Tx, I am not quite sure what part of the county that is in. Our offer was from a private party. We were offered $25 per acres signing bonus and 1/6 royalty which attorneys are telling me is on the low end. I don’t want to be greedy, nor do I want to be stupid. This is all very foreign to me. What kind of royalty and signing bonus have you been offered? We are turning over the lease to an oil and mineral attorney. I want to make sure I am doing this correctly. I need to make sure not to give the title away either. I have read lots on this, an attorney is a must as far as I am concerned.
Larson said:
I received an offer last week. Our minerals are in the NW area of the county. I was contacted by Diamond Resources, representing Petro-Hunt. Is this where you are located? I understand the drilling is moving that direction and am wondering if I received a good offer and if other drillers are buying up leases in that area.
Suzi: I don’t have direct knowledge of terms in Williamson County but I have leased in the Gulf Coast and N Texas. Terms can vary greatly depending on the prospective area of interest and whether or not it is considered high risk (wildcatting) or low risk with some certainty of commercial production. The research I did a few years ago showed that royalty interest rates being offered were typically in the 20% (1/5th) range with bonuses being several hundred dollars per acre. Primary terms to drill were typically 3 years. One rule I follow, in managing the minerals for our Family’s interests, is that the land agent must represent an Operating Oil & Gas Company or to deal with the Operator directly. This will enable the mineral owner to negotiate more favorable terms. I also require the land agent to identify the Operator before we have further discussions. I have had no problems with this request.
Larsen: This is interesting. Are you saying there is mineral leasing west of HWY 183 or NW of Georgetown? There was one gas well drilled in that area but is temporarily abandoned. The Operator is Aspect Energy. This is of interest to me since I am just south of this area in Travis County.
suzi bird said:
We are located in Thrall Tx, I am not quite sure what part of the county that is in. Our offer was from a private party. We were offered $25 per acres signing bonus and 1/6 royalty which attorneys are telling me is on the low end. I don’t want to be greedy, nor do I want to be stupid. This is all very foreign to me. What kind of royalty and signing bonus have you been offered? We are turning over the lease to an oil and mineral attorney. I want to make sure I am doing this correctly. I need to make sure not to give the title away either. I have read lots on this, an attorney is a must as far as I am concerned.
Larson said:I received an offer last week. Our minerals are in the NW area of the county. I was contacted by Diamond Resources, representing Petro-Hunt. Is this where you are located? I understand the drilling is moving that direction and am wondering if I received a good offer and if other drillers are buying up leases in that area.
Mike, wow, what an incredible amount of information. This is all very helpful. I will pass this on to the attormey that I have found to look at my lease for me. Thanks so much. I do know that the lease is for 3 years. I don’t know if it is high or low risk, but I know that one of the other land owners on this tract has referred to it as wildcatting. Being a California girl I only know beach terms…no oil jargon! Yes, we will make sure to find out who the operator is. Thank you so much. If I get any more info I will post it. I appreciate your help so much. This is all so foreign to me. Suzi
Mike Igau said:
Suzi: I don’t have direct knowledge of terms in Williamson County but I have leased in the Gulf Coast and N Texas. Terms can vary greatly depending on the prospective area of interest and whether or not it is considered high risk (wildcatting) or low risk with some certainty of commercial production. The research I did a few years ago showed that royalty interest rates being offered were typically in the 20% (1/5th) range with bonuses being several hundred dollars per acre. Primary terms to drill were typically 3 years. One rule I follow, in managing the minerals for our Family’s interests, is that the land agent must represent an Operating Oil & Gas Company or to deal with the Operator directly. This will enable the mineral owner to negotiate more favorable terms. I also require the land agent to identify the Operator before we have further discussions. I have had no problems with this request.