Today a man from a gas company showed up at my door with a oil, gas and mineral lease he wants me to sign. It say's they will pay me 20% royaltys, but doesn't say 20% of what? Help please
2007-03-26 14:47:25 · 9 answers · asked by Debbie M 1 in Business & Finance ➔ Other - Business & Finance
Be careful. It probably also says they can do exploratory drilling, etc. This is not a question for yahoo. Take the contract to your lawyer immediately. If the contract is legit, it could be a windfall for you. If not, you may be taken to the cleaners.
Good luck!
2007-03-26 14:53:09 · answer #1 · answered by Bare B 6 · 1⤊ 0⤋
The questions you should ask are as follows:
1. How much bonus will they pay you to sign the lease?
2. What state is it in? If a southern state where the production taxes are lower you should ask for 25% Royalty Interest.
3. How long is the term? The shorter the better. Typical is 3-5 years.
4. Is there an annual rental for the lease or is it paid up? If it is paid up you can ask for a higher bonus up front.
5. What oil company does the landman represent?
6. Will they committ to drilling a well?
Good Luck!
2007-03-30 17:23:03 · answer #2 · answered by gizzywitch 1 · 0⤊ 0⤋
Do not Sign it until you understand everything there is to know about it.
Make no claims to it, don't sign it, and don't let anyone convince you to sign it until you understand what will happen if you do.
If they offered you 20% royalty's that means that, IF they find what they are looking for you would get that much of the profits. But they may come in and find Nothing, then you would be stuck with a big headache.
Like the property damages don't get cleaned up and they, just, leave it for you to figure out.
READ the lease agreement, several times to get an idea of what wording protects you as the property owner.
If you can not make heads or tails of it and you have the unsigned lease, take it with you to show to some lawyers who you can consult with.
Ask them to explain to you what is for, how it will benefit you, and what needs you will have to consider. When you understand the Contract / Lease take steps to do the best you can.
Do this with as many lawyers as you can find that will offer their council without charge, and they say they will not charge you anything until you choose to hire them as your legal council.
Get it in writing, that they offer their council free of charge until you hire them.
Do not take the first lawyers advice and jump to do what ever they suggest. Get at least four lawyers from different Corporate Law offices to give you an assessment of the lease.
2007-03-26 22:14:08 · answer #3 · answered by d4d9er 5 · 0⤊ 0⤋
If i was you i would go into town and talk to a laywer. My wife worked a oil company figuring out the mineral rights that people have on there land. If you are sitting on top of a sizeble oil deposit there is some money to be made, you might shop around and get a better %. I am no expert, but I would be careful as there mostlikely is something in the ground that you dont know about, but some else wants it. I know that i would not a working pump jacking a 150 feet from my house.
2007-03-26 21:54:21 · answer #4 · answered by Corey R 1 · 1⤊ 0⤋
If one person is interested, you can bet that others will be as well.
Phone some of his competitirs and see what they'll offer. Then play one against the other to get better deal.
I would definitely NOT sign a lease for 20% unless I knew exactly what the 20% was and a lawyer had looked at it.
2007-03-26 21:51:12 · answer #5 · answered by Anonymous · 1⤊ 0⤋
Just recently signed an oil lease, got 20% and $1000 per acre bonus. depending on where you are located will determine prices. I believe i could have gotten more but who knows. stay away from small time leasers They lease your rights and release to bigger companys and make a profit ( middlemen) I am in Fayetville shale deposit area,
2007-03-26 22:03:13 · answer #6 · answered by kubota 1 · 0⤊ 0⤋
My father-in-law has some property in Texas that he has leased out a couple of times, and he calls it "enviornmental gambling".
According to him, he gets some up-front cash, and that gives the leaseholder the right to drill your ground at anytime if they want.
Most of the time, leases expire with nothing happening, and you have free money.
Sometimes, the energy company decides to put up a well and see if they can find anything... The problem is... Most of the time, they poke around at your ground, dirty up your property, and leave either a huge pump sticking out of your ground or a massive hole in the ground.
2007-03-26 22:05:16 · answer #7 · answered by Michael W 3 · 0⤊ 0⤋
Have him leave a copy of the lease so you can have a lawyer look it over. Then take it to a lawyer and let him explain it to you. If the guy won't leave a copy or pressures you to sign, show him the road.
2007-03-26 21:52:03 · answer #8 · answered by steve.c_50 6 · 0⤊ 0⤋
Consult your attorney before you sign,This well give you "peace of mind" and you can`t put a price on that.
2007-03-28 22:44:32 · answer #9 · answered by bep 2 · 0⤊ 0⤋