Unit agreement question - Douglas WY

Oil and Gas Leasing Help
1

I’ve received a unit agreement from a reputable company. The unit is approximately 24000 acres near Douglas WY and our portion is approx 720 acres, of which I own a 12.5% stake in the minerals. There is no mention of lease bonus or my royalty amounts. The landman who approached us in the beginning offered $150 per acre and 18.75% royalties, and quickly came up to $250 per acre.


My question is should this agreement include the bonus and royalty amounts? Or does that come later?

Thanks!
2

Thank you for the information, Ted. We have not signed a lease agreement but there is language in the unit proposal which does state that rents and royalties are based upon previous lease agreements. I guess I need to contact the oil company to get the lease and royalty agreement.

Thanks again for all you do on here! I enjoy reading your posts.

George



Ted Preston said:
George,

Normally you would have already leased the minerals before you are asked to sign a unitization agreement. The bonus and royalties would be spelled out in the initial lease of your minerals, and the unitization agreement would deal with the combination of your minerals with others into a single unit. I would not expect a unitization agreement to discuss royalties or bonuses.

If you have not yet signed a lease, you should be wary of signing a unitization agreement until you have a lease in place.