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My mother has mineral rights in Stanley and has been contacted by an attorney to start to drill on her land. The question I am getting at is we are from out of state, so how will she know if anything is found on her section of land? Do we just trust the attorney to contact her or is there someone we can contact who would tell us?
Thanks for any info..
Visiting from the Texas forum . Most likely your mother is dealing with a Landman versus an attorney, although it could be an attorney working as a landman. You can look on your oil and gas lease to see what company leased your rights and contact them directly to get an update on production. If the company drilled a well and did not pay you the royalty they would get in big trouble with the govt and that is not something they would risk. Keep in mind that it can take from a few months to several years from the time they start taking leases until they actually drill a well.
Thanks. I did call the oil and gas division for her and they were able to look at the section of land for her. They said there werent any permits yet for that section. What does that mean actually.
Once an area is all leased up and they are ready to actually move the crew in to drill they will file for a permit with the state and post a designation of unit (at least this is how it work in Texas) in the county records showing the exact dimensions of unit and all the tracts of land included. Units can vary in size so your piece of the pie, assuming the well is producing, will be the percentage of acreage you own in the unit times your royalty. For example to make the math easy, if the unit is 1000 acres and you owned all the minerals under 100 of those then you have 10% of the unit and then if you have a 1/5th royalty u get 20% of 10% of the profits of the well.
We have a well in Stanley. They started drilling on July 11th. Our lease says we get 14%. We own 20acres of minerial rights. Could you explain what that means in $$$. I saw your formula I'm not sure how it works.
It is my understanding, that the mineral owners get about 6% of the money produced from the well...the rest goes to the oil companies (cost of drilling, etc..)...so if say you get a well that produces 200 barrels a day... X's the price of oil..say $100. per barrel..that would be that would be 20,000 a day...your share of 6% would be $1,200. per day to be divided up between you and the other owners...since you get 14% for your share...about $168. a day...X's 365 days a year...or around 60,000 a year...but it could be higher or even lower, depending on how well the well produces, and the price of oil. But I could be way off...this is just what I've heard from those who have wells.
If the oil companies are paying 10% of profits to the owners...then it would be even more.
I am curious as to the going rate for oil leases in the area. The oil company offered $60 per acre to lease the mineral rights for 5 years plus 15% royalty on the oil taken from my 320 acres. Is this the average or do I need to negotiate a better deal.
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