Mineral Rights lease- gas

There is a land owner with 4,000 acres of land who has already had a mineral study done showing the existence of natural gas deposits. He is wanting to sell the mineral rights for $600 an acre plus wants a 40% royalty on production. There is no production underway at this time. The asking price seems high but I’m not familiar with standard rates. Any guidance you can give is appreciated.


First, how far away is the nearest "proven" production in this area. Second, how was this mineral study conducted and have you verified through a reliable source (landman/oil and gas specialists) the outcome of this study. I would do extensive research into this matter before negotiating any lease with this individual.


I'm afraid that with the information given here, or the lack thereof, is not going to garner much qualified input. You may get some high level, off the cuff comments, but likely nothing that can be of any real value to you or any others reading this post. Should you care to put some specifics here (State, County, the source and contents of a "mineral study", etc.) then you will have a much higher chance of productive input.

A 40% royalty is almost unheard of.

If you are the prospective buyer, I would advise that you hire an oil & gas attorney. I think you have misunderstood the terms of the deal.

I agree with Mr. McConnell above.