My first time to post, so forgive my elementary questions…I’m a newbie at owning minerals. I and my 5 siblings each own 1/56 undivided mineral interest in a 681 acre tract of land in Leon County, TX. We received an offer to lease 299.5 acres in the Peter Tumlinson survey, A-874. (This 681 acre tract also contains 3 other surveys, G. Higgs A-370, I Killough A470, and M Guinan A-1107 in Leon County.) The offer is for $175/ net mineral acre Bonus, 1/5 Royalty, and 3-year primary term. We all believe that is a low offer, and have asked for more bonus and royalty. I’m pretty sure that some of the other 56 people have already signed the lease. My question is do we have to go with this company’s offer just because some have already signed, or can we consider offers from another company?
Consider ALL offers. You can choose the one that is acceptable to you. Never hand over a lease without a check.
What is the name of the company that is offering you this lease? You are correct that the initial offer is low. I know of another lease offer where the initial bonus offer was $750 per net mineral acre.
Petralis Energy Partners, LLC in Houston TX
Welcome to the Forum. Just because another owner or owners in the same tract, section, or unit as you accepts leasing terms and signs a lease for their minerals does not obligate you to do the same. It is in your best interest to field offers from others to help you understand the market and provide you with greater understanding and leverage in the negotiating process. The 20% royalty seems to be the going rate in the area; however, you should expect more bonus money. You can always ask for a 25% royalty. In the end I would recommend choosing which is more important to you, the royalty or the bonus money, and focus on negotiating one or the other. However, I don’t think it hurts you in the beginning to ask the offering party to “sharpen their pencil” on both, depending on their response you might gain insight into which is more important to them.
I don’t think Petralis is one of the companies pursuing the new Lower Bossier gas play. It’s more likely that they are targeting something shallower, maybe Woodbine oil.
Petralis recorded two leases in Leon County back in November, and they included a three year term and 20% royalty. No information on bonus amount.
Thank you all for your response to my questions. We are waiting on a response to our request for more bonus and royalty. Questions I will be asking the landman in the meantime: What is the name of the geologic formation to be drilled, and is the well to be drilled on our tract? How deep will the well be? (They will know that, won’t they? And my sister says we should probably have a depth clause in the lease.)
Is there a map of geologic oil and gas formations in Texas with the tracts also showing? Maybe on the RRC website? I would appreciate it if anyone can direct me to it. I appreciate any other suggestions!