By inheritance, I own a small undivided fractional interest in a 40 acre tract on the Public School Lands Survey in Reeves County. The original interest was created in 1920. I have been approached by an oil company about leasing it. They say that the State of Texas owns the mineral rights, but as the surface owner I am the state’s leasing agent and will receive one-half of the bonus and royalties. I have three questions about this.
(1) The original warranty deed purports to convey and warrants the entire estate, “except the one sixteenth mineral rights due the state of Texas.” Does Texas in fact own all the mineral rights or just 1/16?
(2) Assuming Texas owns the mineral rights, am I correct in thinking that the form of lease will be prescribed by the Texas General Land Office (“GLO”)? Does anyone have a link to a PDF of the applicable form?
(3) I read somewhere (I think on this forum) that the GLO insists on certain minimums in its leases, specifically a 25% royalty and $3500 per net mineral acre bonus? Is this true?
Tracts in PSL Survey have varying mineral ownership - some are fee to individuals, some are State owned and leased by GLO, some are mineral classified (State owns minerals and surface owner leases as agent for State) and some are subject to State mineral rights which operates as an NPRI. If your tract is truly subject to 1/16 minerals owned by State, then the royalty rate you negotiate will be allocated 1/16 to State of Texas and the remainder to you. If you sign a 1/4 lease, you get 3/16 royalty and State gets 1/16 royalty. I think that in this situation, you may use your own lease form. If your tract is mineral classified then you use the Relinquishment Act Lease form on the GLO website. Enter the GLO Energy Business section and then Oil and Gas. You download the form and it is locked except for the fill-in blanks, such as name of surface owner, bonus, legal description. Use GIS viewer on GLO website to look for your tract on a map and see the status of your tract. Or contact Deborah Cantu who is responsible for Relinquishment Act leasing and she can confirm the status of your tract. Her phone number and email are on the GLO website.
3500.00 pnma owned is way to small a bonus I think. In 2018 we negotiated three Reeves County mineral interests for 10k and 15k pnma. In 2016 we leased a parcel for 5k. Don’t be undersold! The interest we signed in 2016 is a minerals classified interest meaning we own the surface and act as an agent for the State Of Texas. We used a mandated State Of Texas lease form. Split the royalty, and bonus 50/50.
This was most useful. Thank you. The GLO GIS map does indeed show the section where I have an interest as Relinquishment Act lands where the state owns the minerals and the surface owner acts as agent. But the information doesn’t stop there. If there are current leases on the land, the map will show the lease file number for each tract and you can view the actual leases in PDF format and see their terms. All of the leases were indeed on the GLO approved form, but a couple of approved leases had been modified by fairly elaborate addenda, so the form isn’t set in stone. All of the leases I saw (2016 to early 2018) had 25% royalties, but approved bonuses were as low as $800-$1000 per acre on this particular section.
You should consult with Deborah Cantu as to current bonus rates in the area. Bonus rates vary greatly in Reeves County, being lower in southern portions where Apache holds leases. Read the Relinquishment Act Lease and review the addenda on other leases to see what you may want to add.
$3500 is way too low. I would expect closer to $9K or $10K nma
I have not negotiated my royalties in PSL but I know that if more drilling starts, the rate will go higher
I’m waiting it out until it gets closer to $12K
What’s “School” classification mean under the Patent Information on the GLO website? The land is not subject to mineral classification (RAL) or anything according to the GLO map and legend.
Look at the bottom of the GLO GIS map for a blue button labeled Tools and then open a second button that pops up labelled Legend, and it explains the color coding for the different land classifications in Texas. There are several types of “School” land, so it depends on what type you have. The GLO website has some materials also.
In Reeves County, land is identified primarily by section, block and survey name - as well as a few with township thrown in. Public School Land is the survey name. Some areas are H&GN Ry. Co. Survey (where a railway company surveyed) and others have individual surveyor names. Not all PSL tracts have the same mineral treatment. It depends on the terms of the sale by the State. Some are mineral classified (RAL). In others, the State retained a set royalty (NPRI) and the surface owner gets the difference between the lease rate and the State rate. In recent sales, the State retained all minerals, caliche and water. Some were sold 100% to buyer. You have to research what you own / surface only / some or all minerals / were minerals subject to a burden.
I haven’t had the opportunity to review the RRC’s new additions to their mapping, but there are thousands upon thousands upon thousands of Surveys in the 254 Counties in Texas.
I know that the Texas General Land Office (GLO) has been working diligently for years towards identifying all of the lands that are Mineral or Free Royalty Classified or State Owned, but cannot imagine that they have completed such a Herculean task.
The best way that I am aware of to accurately discover what your lands are Classified as is to contact the General Land Office. In particular, Walter Talley, the one and only person that I am presently aware of that researches such things for them.
From what I understand, he can tell you what your lands are classified over the phone for free, but he is not allowed to email you information about it. If you want something in writing, he can send you a Letter of Classification, but you have to snailmail them a check before they will prepare one. I think it’s $25 per Letter, which is probably per Survey.