I received a “paid up oil and gas lease” for mineral rights inherited from my father who of course inherited from my grandmother. Murphy District, Ritchie County. I received 5.22266 net acres (1.5625%) of 334.25 total acres of the subject property. I’m sure the lease is in the best interest of the oil company, HG Energy. Royalty payments are “12.5% on the net amount computed at the wellhead” Of course net includes deduction of all post-production costs. The letter states “best and final lease offer” but then goes on to say that if I choose not to execute, then in accordance with the “Co-Tenancy Modernization and Majority Protection Act” I can elect for production royalty of 12.5% on the “gross proceeds received at the first point of sale” along with a lease bonus $1,044. No delay rental payment or other non-royalty mineral payment.
Is there a benefit to signing the lease or not, and/or selecting the cotenancy election for production royalty instead? Clearly, I know nothing about oil and mineral rights. Is it worth having a lawyer review for such a small percentage? Thanks!