This is my first lease and I was first contacted over the phone, I own half of 25 acres so when I was told $1875 I assumed that was $150 per acre. When the lease came in the mail the cover letter says the upon lease being signed will pay $1875 per acre. Is this a common way to phrase total acreage or if it were actually per acre would it have to say per net mineral acre or mineral acre?We own 25 mineral acres together. Thanks!
Joe:
Generally, when you recieve a lease, the cover letter will reflect the "Gross" acreage and the total "Net Mineral Acres". The amount of net mineral acres is what your bonus amount will be based on @ so much per acre (the agreed on price/acre). In your case, it sounds like there are a total of 25 net mineral acres in which you own 1/2 undivided interest. You will be paid your bonus based on the 25 NMA but your royalty amount will based on the 1/2 of the 25 acres. I may have misunderstood what you are saying and if I did, please corrent me.
Do you mind saying who offered $1875 per acre as that sound like a strange odd amount and a little on the high side also for that area.
I would check to see if there was a well on my mineral acres before signing anything. If Mineral Joe thinks it is a high offer for the area, the checkbook may have opened to fix a situation that could be even more costly to the operator.
Mineral Joe said:
oil valley petroleum, and I agree which is why when we talked on the phone and he said 1875 I assumed it was for all 12.5 whicj would be 150 per acre, much closer to typical, but in the offer it cleary says "paid $1875 per acre". This being my first lease I wasn't sure if that was a typical way of phrasing it but me not knowing anything about mineral interests 2 weeks ago would only take it for what it says, per acre, just kinda confused and hate to get my hopes up!Do you mind saying who offered $1875 per acre as that sound like a strange odd amount and a little on the high side also for that area.
r w kennedy said:
Ok, I am not sure exactly how, I tried at one time and saw nothing but when I checked my section, township and range I saw a well was drilled in I think 1981, it was capped and described as tight and wet.I would check to see if there was a well on my mineral acres before signing anything. If Mineral Joe thinks it is a high offer for the area, the checkbook may have opened to fix a situation that could be even more costly to the operator.
E/2 NE/4 NE/4, SE/4 NE/4, SE/4 SW/4 NE/4 Section 26, Township 4 south, Range 2 East.Carter cty OK
I dont know if it makes any difference but the lease is actually a 70 acre tract of wich we own 25 acres.
The check came today. It was $1875 total ($150 per acre). Does it matter that the lease offer in writing says they will pay $1875 PER ACRE? It seems rather misleading.
Joe:
First, I would not cash the check until you did some further investigation into what you own. If you own 25 NMA, you should be paid on this amount. Contact the company and find out how they figured this amount as based on $150/acre, they paid you for 12.5 acres.
Sorry, I mentioned earlier in the post, its 25 acres owned by my brother and I. (12.5 acres each)
Joe:
Does your legal mineral description state 25 acres "undivided interest"?
I will double check when I get home tonight but I know I have seen 25/70 interest, I was told we own 25 nma of a 70 acre tract, the lease also says for 70 acres.
Joe:
Do some checking and see what you actually have in regards to mineral interests. Again, do some serious research into this matter and don't cash the check until you have got an accurate account of the amount of mineral acreage owned.
Ok, and if it is actually 25 acres together between my brother and I, would it matter that the written offer says upon signing the lease they will pay $1875 per acre? Is there a way to do anything about that and does that offer have any legal standings?
Joe:
Again, look at your cover letter and it should provide the following info: Total NMA; Price/acre; % royalty; lease term; and legal description of the property. Also, it might show Gross Mineral Acres After you have reviewed these documents, call the company and find out how they came up with these figures. Again, somewhere there appears to be a misunderstanding. Once you have sorted this lease out, then you should be able to make a determination as to what you are subject to be paid.
Thank you
If lease offer stated $1875 per acre and they told you on the phone the same then perhaps the mistake was of the secretary who made out the check, but, $150 is much closer to going rate but on the low side as $350 per sounds more in line. I didn't notice, have you already sent then a signed lease?
Yes, I sent it right away, I am guessing it was a mistake too but when we talked on the phone he said 1875, he did not say per acre he just said 1875 so I assumed it was 150 per acre but when the offer came and it said 1875 per acre I was no doubt over joyed! If it was an error is that something they could be accountable for?
You could send them a copy of the written offer stating they under paid you because it states $1875 per acre, even though it sounds like a typo. You could also hire an attorney and you'd win in court with the lease offer letter in hand.