Mining near Akin, IL Franklin County Illinois

Have another question…the lease refers to an extension clause for an additional 20 years. They say they will pay $150.00 signing bonus…why that amount then? Why not $150.00 now rather than $100.00…who makes this amount decision?
Also…they say IF oil is discovered…they pay after expenses a percent of %18.75… do they KNOW oil is there too? They speak about PRODUCTION royalties…but…also sounds like they will pay a lump sum in 12 months? Not sure what is going on…appreciate any help!! Thank you!!!

Sounds like we’ve been offered the same lease. My family has not signed the lease yet, not sure what we’re going to do. Have you signed with them and if so how it going. This is all new to me.

I never lease for more than three years (and sometimes less). I never sign an extension clause for any extended time. They should pay the leasing bonus up front. Do not hand over a lease without getting paid. If they say they need to do title work, then a third party can hold the lease (such as an accountant or attorney) and only turn it over for a real cashier’s check. That is called a paid up lease. If oil or gas are discovered in the first term of the lease (typically three years), then they will pay you 18.75% of the revenue minus any taxes or post production charges if allowed.

If you are new, I suggest that you read the Mineral Help tab above as it will help you get started. I would also go to your state website and find their oil and gas division and get educated about what is going on. If you have never signed an oil and gas lease before, I would recommend getting an oil and gas attorney to look it over. Rarely is the first lease presented to you ever in your favor. It will need some negotiation to get it more favorable. It is really important to do that because the one lease can hold your family for decades and decades and you want it to be a good one.