Hello,
I am new to the ownership of Mineral Rights (MR) being a CT person. Much of the family comes from the Huntsville area, and it turns out retained the MR to land that they sold off. My Mom has a present lease with Acock Operating Limited that she signed several years ago. She was recently approached by an operator named San Luis Energy LLC to lease a different tract of MR. This tract is divided between several family heirs. I'm helping my Mom now with her finances, and trying to understand the ins and outs of leasing MR, as I am also inheriting some from my aunt. I have read through the resource guide but still seem lost.
This lease does seem to contained some of the clauses recommended to remove. There is a large clause on pooling. It gives the recurring right to pool all or any part of the leased interest with any other lands, leases, or interests, etc. There is a warranty of title clause. The details are a royalty interest of 1/5th, a signing bonus of $100/mineral acre/for a three year lease (with a 2 year option), for 225.52 acres. My understanding from a cousin in the area is that there is not much O/G activity in Walker County, but that this land is located just across the stream boundary with Madison County, TX, where there is a lot of activity.
I can't find any online information about this area. Do these terms seem fair? Is there an example online of a good O/G lease?
Thank you for your help.
Mary
Mary, the royalty seems fair, although more might be available. The bonus money seems low. I personally would
sign a 3 year with no options. The other two in my opinion should be stricken, but I'm no lawyer. Make sure you
get a GOOD Oil and Gas lawyer to look over your lease before you sign anything. Be advised that 10 well
permits have been granted on the Ferguson Prison Unit in Madison County just across the river from Walker
County. Take your time an educate yourself as best you can.
Hope this helps a wee bit
Thank you for your input.
How do you find a good O/G lawyer, and what sort of cost is that?
Thanks,
Mary
I was also contacted by San Luis Energy, LLC/Brett McDanald and I chose to hold off. In doing my Google Search, I found a blog by Maok & Moak, PC "Seek advice before signing oil & gas leases" out of Huntsville, TX.
Another site I found was http://webaps.rrc.state.tx.us which I assume is the Texas Railroad Commission site and I did a Query Path for Walker county and was able to see the current leases as well as operators. San Luis Energy may very well be a flipper and they are certainly not an operator in Walker County. The majority of the producing wells in Walker county are natural gas with some limited condensate with the Gibbs Brothers leases and the Tanqueray Unit doing very well. There are a few oil producing wells. I too need to gather more information before signing a contract and leaving real money on the table.
Martin Wampler said:
Mary, the royalty seems fair, although more might be available. The bonus money seems low. I personally would
sign a 3 year with no options. The other two in my opinion should be stricken, but I'm no lawyer. Make sure you
get a GOOD Oil and Gas lawyer to look over your lease before you sign anything. Be advised that 10 well
permits have been granted on the Ferguson Prison Unit in Madison County just across the river from Walker
County. Take your time an educate yourself as best you can.
Hope this helps a wee bit