Mineral rights?

[PSD Ryan]

I've got a house on a quarter acre lot in North Richland Hills that I bought a month ago. I didn't buy mineral rights with the house. A landman came by today and told me the former owners had leased the mineral rights, and the lease transfers to us, but the lease expires sept 8. He was asking if I'd like to extend.

First of all, how do I make sure his company actually owns the mineral rights and isn't trying to get me to lease something they don't own to lease?

Second, is it worth it? he told me they lease for about $4,000 per acre, so about $1000 per year for my lot. I think he said I get the "standard" 25% royalties but I don't know how much that would amount to in a year, and that's if they are even using it. I can't really afford it, so I think I will let the lease expire, but does anyone know how this works, and if it's really worth it for a quarter acre?

[Peyton]

First, you don't pay for the lease, they pay you

If it is an extension, then they already hold the lease and want to extend it before it expires. Extensions are normally shorter than the primary term of the lease, ie a 3yr lease with a 1yr extension. Because they are shorter term, they normally pay less.

The 25% royalty is "normal" and the only % I would recommend.

Since you own 1/4ac, you would get a very small percentage of the production in the pooled acreage, but it's free money.


My best advice would be to talk to some of your neighbors and see what they know about this. Yall are all in the same pool and should work together as much as possible.

[Dejashoot]

I've got a house on a quarter acre lot in North Richland Hills that I bought a month ago. I didn't buy mineral rights with the house. A landman came by today and told me the former owners had leased the mineral rights, and the lease transfers to us, but the lease expires sept 8. He was asking if I'd like to extend.

First of all, how do I make sure his company actually owns the mineral rights and isn't trying to get me to lease something they don't own to lease?

Second, is it worth it? he told me they lease for about $4,000 per acre, so about $1000 per year for my lot. I think he said I get the "standard" 25% royalties but I don't know how much that would amount to in a year, and that's if they are even using it. I can't really afford it, so I think I will let the lease expire, but does anyone know how this works, and if it's really worth it for a quarter acre?

Doesn't this mean that the land man wants to talk to the person who still owns the mineral rights?

[PSD Ryan]

He made it sound like I was paying him for the lease.

[Dejashoot]

No sir. An oil/gas company is pulling product out of the ground. That company pays the minerals owner for the right to pull oil out of the ground. That company then sells the oil or nat gas. You have to own the rights in order to lease it to them.

[PSD Ryan]

I guess I must own the rights. I didn't think I did.

[Dejashoot]

Important that you find out.

[Peyton]

The closing documents for you house should indicate if the minerals were conveyed or not. If the lease is extended, the mineral deed will be researched and the current owners will be paid.

[DrenalinJunkie]

Check your paperwork.

[Carpe_diem]

In Texas, a general warranty deed to you conveys all interests in the land owned by the seller except those specifically excluded in the deed. So if the deed doesn't mention minerals, then the seller conveyed to you all the minerals he owned. The way a landman or attorney detemines who owns the minerals (forgive the oversimplification here) is to look at your deed and ask 'did the seller reserve any minerals?' If the answer is 'no', then he pulls the deed to the seller and asks the same Q. If 'no' then he pulls the next deed and the next...and if he gets back to the King of Spain (or wherever title originated for your property) and no one reserved any mineral ownership, then you own the minerals.

[sqiggy]

I guess I must own the rights. I didn't think I did.

Sounds like you do now. Maybe when you bought the place, the sellers signed off on the wrong papers.
I work with a guy that bought 50 acres and that's what happen to him. The realtor/owner tried to screw him over on the "final" price at closing, and after arguing back and forth, my friend ended up gettin 100% mineral rights on that 50 acres when the owner got so frustrated, she signed over on the wrong papers!!!