Hello.
I was unable to edit my previous post so I deleted it after answering some of my own questions…
I recently acquired mineral rights in Cooke Co. Texas. 23.15 NMA is leased (up to this point only speculative, non producing) since 8/2024 from my father’s life estate. He passed last year and I’m the sole heir and affidavit is filled in the county.
The last month or so I’ve received many offers to purchase these rights through the mail and cold calls. Within the last few weeks the current leasing company has been in contact pushing to get a new lease to include a “non leased interest” and get everything transferred into my name. I’m currently waiting on said new lease to arrive in the mail for review. I didn’t think much about all of this, just figured I was flagged when the estate was distributed to me and county records were filed. I also inherited several parcels of land and received similar offers for that.
Last week I received a notice from the RRC for a spacing exception permit rule 37. This application is for a new drill permit on a1290, Clegg 2h, 680.08 acres.
RRC mapping shows this will be a horizontal well and runs through my interests (specifics below). I had no knowledge that this new well was in process.
The current lease (8/2024) includes 35.3 and 67.02 acres on a-1369 and 95 acres on a1353. Royalties are 18.75% of net at wellhead after taxes and post production costs. $400 per acre bonus. 3 years with 2 year renewal. I know these aren’t the best terms… I’m considering negotiating for 25% royalty no expenses and $400/acre bonus.
Questions:
- Is the lease from my father’s life estate void after his passing, or is it still valid?
- The platt only lists one name for each tract. Based on the current lease I should have at least 3 tracts on 2 units but the rule 37 notification lists me for 2 unleased tracts. How can I determine my actual NMA that will receive royalties from this well. I’d like to know per unit(s) and tract(s) specifically.
- Is 25% royalty, no expenses and $400/acre bonus realistic? I feel like I’m in an excellent position to negotiate but don’t want to hold out for something that’s completely unreasonable. Should I ask more? Accept less? Or should I just hold out unleased and wait for my share after costs?
- Is there any way to estimate what kind of production to expect from this well and the timeline for royalties to begin paying out? The most recent offer I received was for $80,000(~$3500 per acre)… it’s tempting. I assume with an offer like that I should expect much more over time from my royalties.