We was approached by encino energy that our great grandfather has mineral rights in Jefferson county ohio… there is 7 family members involved with these right… they want to lease these mineral right… we have no clue at all about this… we have 11.77 acres… representive from encino energy is sending us lease agreement this week, now. In the paperwork I assume it will show us some money amounts, how do we know this is a fair amount…I’m taking mine to attorney… how much are mineral right going for in 2020?i did read in 2017 they were $6,000 a acre…??
Suggest that the family retain an oil and gas attorney to read that pending lease. It will be all in the operator’s favor and not the mineral owners’. The terms can be negotiated. The money amounts for the bonus on the lease can be relatively small compared to the royalties over the years if the well is productive. The clauses in the lease contract control the use of the minerals for many years, so it is important to get good counsel at the outset.
So how small of amount…?? And they have to pay royalties every month they have the lease for or just if they hit oil or gas?.
The bonus pays for the lease upfront for how many years the lease is stated for the primary term such as three years. (They used to pay once a year, but that is very rare now). The royalties only come if a well is drilled and it is productive. So two different payments-one is guaranteed (bonus) and one is not guaranteed (royalties) unless they do have a productive well. Then the lease moves into the secondary term and the royalties are paid as long as their is production on the lease. Bear in mind that the lease can hold your family for decades, so you need to get professional help to make sure it is in your favor.
Ok so bonus payment is how much ? How much does it go for ?.. understand royalities… so they pay the bonus soon as you sign papers and they receive them back… I’m getting a attorney just for this matter…
I do not know what leases are going for in Ohio. They may be somewhat depressed right now due to the drop in oil and gas prices. Someone on the Ohio forum may be able to answer that better.
These mineral rights we had no clue about them. They were I guess my great grandfather… my uncle was approached by encino energy about them… we all spoke with representative from encino. And we are being sent out lease papers supposed to get them one day this week… I’m really thinking it’s just a big waste of time, waitin on the papers to get here… yes I know oil and gas is very low now, I am well sorta in the dark about this, my other family members are signing their papers and sending them back with no issue, but something is telling me to investigate and see about all this… they won’t do anything until we all sign the leases… I know it’s u expected money whatever amount it I’m still skeptical…
If you are new to the industry, welcome. A good place to get informed is in the Mineral Help tab above. There are some basic things to know posted. There is also a nice little book called “Look before you Lease” by Jim Stafford. I found it on Amazon a long time ago. There is also NARO category on the forum. Ohio has a National Association of Mineral Owners (NARO) chapter. They would be helpful in guiding you as to what is going on in Ohio, what the laws are regarding certain clauses in the mineral lease, etc. The first draft of a lease document will almost always be in the favor of the operator and may hold the family for decades. Not a good idea to sign a legal document without understanding what you are signing.
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