You are here:

Oil/Gas/Mineral Rights Lease/Assign


An energy company has offered two options to lease our rights, which one would be the best deal?
#1  Lease/Assign interest for $850 per acre reserving a 1/8 royalty delivering an 87.50% NRI for three years.

#2  Lease/Assign interest for $800 per acre reserving a 3/16 royalty delivering an 81.25% NRI for three years.


The answer is based upon one fact that you must determine - how close is (or how likely is) production to your minerals?

If the production is near by or on all sides of you and they are very likely to hit oil/gas on your property then take the 3/16 royalty since that will pay you a great deal more over the life of the lease.

If the production is a couple miles away and you are not sure if they will drill the well and get production then take the larger bonus.

I'd be tempted to take the $800 and 3/16ths at any cost - but that is me.  You could counter with $600/acre and 22% royalty.

Hope all goes well.  


All Answers

Answers by Expert:

Ask Experts


Cliff Williams


I will try to answer any question you have. Even if I reject a question, I still will give a shot at what I would do in your position. The only questions I will not take a shot at would be a highly technical engineering or geological question. I am beginning to see quite a few questions from land men and other oil companies and that doesn't matter to me either. I will attempt to help.


I am an oil and gas attorney that has been in the business for more than 20 years. I have held a series 22 and 63 securities license, been in oil and gas operations, land man, division order analyst all prior to obtaining my law degree. Today, I typically write title opinions verifying ownership of oil and gas minerals, assist landowners in negotiations on oil, gas and mineral leases, easements and conveyances. I also assist oil and gas companies with the sale of working interest ownership as well as common business law issues.

State Bar of Texas, Member of the Tarrant County Bar and the Dallas County Bar Associations.

Multiple oil and gas topical columns on

I have a B.S. degree which I rely upon more than my Business Mgmt degree or Law degree...

Awards and Honors
Husband and father of 26 years

©2016 All rights reserved.