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About Laura M. FitzGerald, CPL
Expertise
I can answer all questions related to any oil and gas leases, mineral sales, pipeline right-of-ways, LA Dept of Conservation Units; negotiating with landmen for leasing your property, assisting in locating owners of suspended funds.

Experience
26 years in the field and owning my own land services company; being a royalty owner, and participating in drilling wells

Organizations
American Association for Professional Landmen, ArkLaTex Assoc. of Professional Landmen, and Dallas Association of Professional Landmen (DAPL), Women's Business Enterprise National Council (WBENC)

Education/Credentials
Certified Professional Landman, attended LSU, Notary Public

You are here: Experts > Industry > Oil/Gas > Oil/Gas > Oil & Gas Lease

Oil/Gas - Oil & Gas Lease

Expert: Laura M. FitzGerald, CPL - 10/24/2009

Question
An oil & gas company in Harrison County, Texas has approached my family to lease our mineral interest for the purpose of drilling a well on our 44 acres of land. My undivided interest is only 1/1000 or 0.044 net mineral acres of the 44 acre tract. The oil company is offering a 3-year paid-up lease with a 3/16th royalty clause and a $250 signing bonus. The oil company says that the bonus is equivalent of $5,682.82 per net mineral acre.

I had no idea that I had inherited land; all of this came out of the blue. After speaking with others and looking on-line for more information, I'm finding that oil companies pay much much MUCH more than what we have been offered.

I've told the oilman that I will not sign the lease because I not comfortable signing a document I'm not sure represents my best interest. I was also told that the company did not need my nominal interest to proceed with this project since many of the other heirs have already signed leases.

My questions are:

1. Can the oil company proceed with this project without me agreeing and signing?

2. Does this offer sound extremely low? I'm told that this signing bonus and royalty payment is very low.

3. What do you think about this offer.

I have the letters that have been sent and I can forward them under separate cover if you need more information.

I have no knowledge of the oil/gas drilling business so ANY and all information you can provide me will be greatly appreciated.

Thank you.

Answer
1. Can the oil company proceed with this project without me agreeing and signing?
ANSWER: Yes, as long as they have the majority leased, they can proceed without you agreeing and signing.
2. Does this offer sound extremely low? I'm told that this signing bonus and royalty payment is very low.
ANSWER: The signing bonus you are being offered is equivalent to $5,682.82 per acre. Since you only own 1/1000 or 0.044 net mineral acres, this is how your amount is calculated:
$5,682.82 x .044 = $250.00.
If you owned 100% of the 44 acres, you would receive $5,682.82.
I do believe that you could get a higher royalty than 3/16ths.

3. What do you think about this offer.

ANSWER: I don't think it's a bad offer to start with - but I would certainly counter and try to get a little bit more.

If you would like for me to do this for you, I would be happy to do so, free of charge.
Please call my office at 318-219-2464 and speak with Holly Lawrence and she will advise you what information we need to do this for you.

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