Understanding Pros and Cons of Signing a Lease

Understanding the leasing of mineral rights is frustrating. Some of the minerals I am talking about are for 1 or 2 lots were a home is located. Does anyone have a recommendation on a video I can view or something I can read that discusses pros and cons of doing a lease. What happens if I don't do a lease and a well is drilled resulting in production? I will have to sign a division order which in effects gives me the same interest if I had a leased (but no bonus)? Are there any benefits in "not" leasing the minerals? (At this time, I'm not talking about the wording of the lease because that is a whole other black hole for me.)

It's such little money and signing a lease that I don't understand is not something I want to do. Having an attorney look at it will cost more that I will get doing a lease. Lease is for 5 yrs plus add'l 2 yr term option. I would prefer 3 yr lease, but that may not be reasonable. On top of it... the Landman is doing it for Rebellion Energy who already is non-responsive to my email in reference to a different section. I'm not eager to be signing with a company like that.

Any direction would be most appreciated. Thank you.

Susie, 3 years is pretty standard, I wouldn’t go for 5 or an extension. There are also options to get a smaller bonus or no bonus in exchange for a higher royalty %. If you don’t sign a lease you will still be given an opportunity to sign if and when a company proceeds to drill. You will be “pooled” and usually given 2 or 3 options of bonus and royalty. Do not let the company assign you the default option as it will be in their favor not yours.

Michael Hutchison.... thank you so very much for your response. The information you provided has been most helpful.

Susie, Never let anyone pressure you into leasing. If you aren't comfortable signing with this company...don't. Either another company will give you better terms when it gets closer to drilling or the terms of the pooling will be better for you because it will limit the formations that are held by the production of the well as well as give you a bonus if you so choose. Just be sure to respond quickly to any pooling "order" that is issued. It will be signed by the Oklahoma Corporation Commission and have a cause cd # and a pooling order number at the top of the order.

Darla Charlow Ragland.... You provided additional helpful information so thank you very much. I must say that this website has been very informative and I appreciate the time you have taken to help me understand things better.