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Oil/Gas/Seismic permit with leasing option


Do you have info or advice for the below plot of land.  An independent landman has contacted me regarding an 18 month seismic permit with a 3 year lease option.  The terms are $20 per net mineral acre owned for the initial Seismic Permit, $100 per NMA when the 3 year lease is exercised and $200 per NMA when the 2 year option to extend is exercised with 1/5 royalty on all production of oil and gas.  My brother and I are the heirs of the 148 acres and possibly own 100% of the minerals.

The property is in Titus County, Texas 102 acres in the AB 105 Thomas Chatham Survey and 45 adjacent acres in the AB 248 T Garman Survey

Many thanks

Signing that one document could tie up your land for more than 6 years.  

After having said that...the prices they are offering are very good for Titus County so you have to weigh the benefit of the possibility of having production since Titus is not that active.  In your position, I would encourage them to shoot seismic and drill wells but I would shorten these terms up some.

I would ask them to shorten the lease option period from 18 months down to 6 months and see if they counter with 12 and then do the same thing on the terms of the lease.  When they balk you tell them that you would be fine with 3 years and 2 year option for $140/acre and $200 for the 2 year extension.

The idea is to eek out a little more but not run them off from the possibility of a well.  You have plenty of room for them to drill without including any other mineral owners and you would also get a little damages money from their drilling activity on your surface.

You may want to hire an oil and gas attorney to look over the lease form and make sure you are in good shape.



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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.

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

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