Questions about proposed lease agreement

I recently had a conversation with a rep of PetroEdge Energy about the possibility of leasing my mineral rights on a small (.02 acre) parcel in the Ellsworth district of Tyler Co.

He went to great pains to tell me that the lease was a formality extended to owners of essentially worthless claims and offered me $100. The lease is for 5 years and applies to Marcellus as well as Utica shale deposits. Royalties would be 15% at the well head if the land was drilled. I could expect at most a couple checks/year of $25 each if there was a producing well on the land. He could not tell me exactly where the land is and I'm not familiar with family property in that area.

1 - What else do I need to ask him?

2 - Are these terms fair? If not, what else should I ask for?

Views: 263

▶ Reply to This

Replies to This Discussion

Permalink Reply by Nancy Mosley on June 20, 2013 at 3:41pm

Are you part of a family that owns this .02 acre or is your net share .02 acre of a larger tract? If part of larger tract with other family members, it would help to talk with them. 

Small acreages don't have a lot of bargaining power. However I think even then, getting something with no deductions would be important. 

Permalink Reply by Phyllis Miller on June 20, 2013 at 4:38pm

It is my part of a larger tract with close and distant relatives. I can contact the ones I know, at least. Would it help to try to join a group such as the Western Tyler Mineral and Landowner group?

Permalink Reply by Nancy Mosley on June 21, 2013 at 2:27am

It is always better, I think, to have as many of the ones owning rights as possible say the same thing to the Landman. Also, a lease might last for many years, so it is always a good investment to have a lawyer look at it. If there are several of you together, it becomes more affordable. 

I don't know about the Western Tyler Mineral and Landowner Group, as my interests are in Ritchie with a tiny corner in southern Tyler. It would be good to check into this group. 

Is this taxed by Tyler County to you as an individual (yearly tax bill) or does the bill go to one family member? 

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service