Oil & Gas lease for a residential property?

New to the forum and mineral leases..

I received via mail a 5 year oil and gas lease proposal on a cookie-cutter residential property in Henderson Co. The property sits with 100's of other residences which makes this an odd request (to me). Is this approach pretty standard - (i.e. pursue mineral rights within a residential area with 100's of homes).

What would be the benefit for someone to acquire these rights? Should I give it consideration?


With the development of directional and horizontal drilling, it is now possible to access minerals underneath residential areas from a drill site located a mile or more away. One would assume that they have a clear drill site close enough nearby to make your minerals interesting or they wouldn't be looking to lease. Also, the wouldn't need to be directly under your parcel. Any given well will drain an area around it. The State will determine the proper spacing unit for the well and any owner within the unit will share in the production in the well. In some areas spacing units of 1280 acres (2 square miles) are common

Thanks Steve ..

I am at a crossroad "to lease" or "not to lease". The monetary compensation is <$500 for the 5 yr term.

Doesn't seem worth it since I would need a professional to perform a contract review before I sign up. My neighbors received the same proposal - so there is obvious interest in the area.


The $500 is just the signing bonus. The real benefit will be from the royalty you will receive from the production. If your neighbors all got the same proposal, why not contact a professional as a group and share the cost?

If you would like some free help from a 38 year industry veteran, I'll look over your lease for you and look for any real "gotchas." Send me a private message with your information if you're interested.