Out-of-the-blue offer on North Montague County, TX property that once had a lease - payments stopped long ago. Assume expired.
I asked this on Oil and Gas Leasing Help Group (no answer yet) and someone suggested I post here. We own mineral rights in North Montague County, TX and have been sent a leasing contract. This property is shared by two siblings. As a total newbee to this process, I am wondering many things. What is considered a good royality for a leasing contract? Bonus per acre? Where can I find a lawyer who understands these leases and knows what is a good lease in TX and what is a lease to run like hell from? We are told everyone around this property has signed. We are the last ones who haven't signed a lease because they couldn't find us. There is a oil pumping rig sitting across the street which has been idle for many years, and one a half block away. Can anyone give me some insight into these questions. This lease does have "Shut-in royality" clause and participation of owner in production costs. Thank you.
Location in the County is most important. $300/ac to $2000+/ac in the past year. Royalty rates offered are close to 20% but the terms of the lease can compromise that tremendously. Proven geologic formations is the primary reason for the range of bonus. Pioneer lease is the worst for the mineral owner and they get pretty tricky in their title interpretations. EOG is the biggest and best operator in the area to my knowledge.
I recommend contacting Chuck Bartusche in Muenster - he has experience in leasing in Montague County. His fees are reasonable and worth every penny you will spend. Go for 25% royalty -if you are in a proven area the leasing bonus per acre is worth more.
I previously contacted EOG directly last year via email and let them know we had some acreage available for lease in the W. R. Coley Survey in Montague and was contacted by a landman a couple of weeks later. I knew they were working the area so I wanted to get a bid from them as well.
Worked out quite well for our 55 acre tract at $750/acre and 25% royalty. As noted earlier I would not settle for less than 25% royalty in this oily area of Montague. I do not know if they are currently working the area as Eagle Ford has taken a larger role in their development lately.
thanks to all who have replied. Yeah the legalise in these contracts is pretty funny. And why would I sign this unless I understood every clause? I wouldn't. This forum is great for sharing info like this. My wife was born and raised in Nocona. Her mother was pretty much taken to the cleaners 40 years ago with the lease she signed. I aim to see that doesn't happen again.