Q: What if a landman is putting pressure on me to sign an oil and gas lease now?
A: Of course we cannot guarantee that waiting to execute a lease will not result in an operator or lessee losing interest in your minerals for the time being, but in the vast majority of cases, waiting to execute a lease until you have all of the facts regarding your specific situation greatly works to your benefit. Generally speaking, oil, gas and mineral leases almost always contain a primary term allowing oil and gas companies a specific amount of time to drill for and produce minerals, but also contain a habendum clause that allows the oil and gas companies to continue your lease in force and effect for so long as minerals are produced. Consequently, a mineral lease may hold your minerals for long-lasting periods of time (it is not unheard of for mineral leases to hold minerals for fifty-plus years) amplifying the importance of obtaining the best possible lease for your situation.
Realize that frequently oil and gas companies are in competition for the right to your minerals. If a landman is pressuring you to execute something immediately, such pressure is quite possibly a result of the landman attempting to tie up the leasing rights to your minerals before you are approached by competition. In any event, executing a lease for your minerals is a business decision, so if you're feeling pressured to execute something quickly, take a moment to question why such pressure tactics are being employed.
Q: What is important about the terms in the oil and gas and mineral lease?
A: Remember that leases are provided on the terms of the oil and gas companies. In almost all cases, lease terms are negotiable. Production of minerals is a complex process, and lease clauses are frequently filled with very technical and confusing terms. Lease terms are numerous and complex, and the increase in the quality of technology is leading to more complex terms all the time. Undoubtedly, some convoluted lease terms are a function of the complexity of the process, but sometimes such clauses are written in a confusing manner by design so that the average mineral owner understands only a fraction of what the lease actually says.
Q: How much more money can your firm get for me on my oil and gas lease?
A: Each situation is different, and a variety of factors play into each individual mineral owner's negotiations. We cannot, of course, guarantee that you will receive more money as a result of our representation, but the likelihood of receiving a better deal is substantially better if you are adequately represented by experienced lawyers. Call us to discuss payment arrangements where we do not earn fees unless you actually receive a more favorable deal.
Q: Will there be damage to the surface of my land when drilling for oil or gas starts? Is there anything I can do to protect my land from surface damage?
A: Surface damage is a necessary side effect from the production of minerals. While the drilling of wells results in different types of damages and the extent to which such damage may occur, we can generally negotiate terms into your lease to minimize damage and provide that operators must return your land to as close as possible to its original condition.
Q: I only own part of the minerals on my land. Do all the mineral owners have to agree on lease terms?
A: No, but it is generally better if mineral owners can combine acreage in an effort to offer as much acreage as possible for lease. We have experience putting together blocks of mineral acreage and negotiating the best possible leases for multiple parties. Nevertheless, even parties combining together to maximize their bargaining position do not necessarily have to agree on lease terms, and on some occasions mineral owners may actually desire to lease on different terms depending on amount and location of acreage or other circumstances.
Q: What are the different ways I can make money from minerals under my land?
A: Mineral owners can sell or lease their minerals. Leased minerals generally result in an upfront bonus money payment, typically calculated on a per-acreage basis, for execution of the lease. In the event that minerals are produced, the leaseholders must then pay royalty payments for minerals produced to mineral owners subject to leases. If production is substantial, royalty payments may be very large and can continue for long periods of time, providing residual revenue for mineral owners for many years.
Mineral owners can also sell their minerals outright, in which case they would receive an amount acceptable to buyer and seller and execute a deed to the minerals, very similarly to a sale of land. Minerals have various traits (bonus, royalty, developmental rights and rights to sign leases, among others) and sales of minerals may be for only some of these rights or the entire mineral estate. In the event that a mineral owner sells its entire right to the mineral estate, the owner would sell them on terms mutually acceptable to the owner and the buyer, and the mineral owner would have no future right to any money as a result of its former ownership of the minerals.
Q: I want to sell my land but would like to keep my minerals. What do I do?
A: Selling surface land and reserving some or all of the mineral estates is a common practice in Texas, and doing so is perfectly acceptable, but care must be used when constructing the paperwork surrounding the transaction. The fact that minerals will be reserved in the sale should be reflected in the sales contract and mentioned in any listing of the property for sale. Further, a clearly written mineral reservation must be correctly included in the deed for the sale of the surface land. Because of a confusing history of case law from Texas courts, additional care must be used if a fraction of the mineral estate is to be reserved. We strongly recommend always seeking competent legal counsel when reserving minerals pursuant to a sale of surface land.
Q: How do I find out if I own the minerals under my land?
A: This is a question commonly asked that is not always easy to answer. To properly determine whether a party owns minerals underneath a surface estate (and if so, what percentage of minerals are owned) an extensive search of the deed records in the county courthouse is required. Some lawyers will perform this service, and there are reputable land-services companies and professional landmen that will charge fees to determine mineral ownership. We recommend contacting an attorney if you have questions about paying fees to a party to determine your mineral ownership.
The general information contained on this page and on the rest of this website does not constitute legal advice and should not be relied upon, nor should it be used in place of advice received from a licensed attorney. None of the information contained on this website constitutes legal advice because they were not written for your reliance, nor are they necessarily applicable to the facts of your specific case, in the event that you have one.