5 Steps & Tips for Mineral Leasing on Your Property in Texas: Beginner's Edition

Posted by Lillian Frasier on Thursday, February 13th, 2020 at 1:18pm.

Mineral leasing is the act or process of granting the rights to extract minerals (including gas and oil) from the owner of those rights, to a third party, usually a company.

Mineral leasing can be a daunting and complicated process but has its opportunities, specifically the significant profits for mineral rights holders for minimal risk and effort.

Read on to learn about some of the issues involved in mineral leasing Texas land or ranch properties. Our mineral leasing tips for beginners are below...

Step 1: Look at All Your Options

If a company approaches you with an offer for leasing minerals off your land, be sure and consider the fact that if one company is interested, there is a high chance that they aren’t the only ones.

Look for other companies that might be interested in a mineral leasing deal, this will give you more bargaining leverage for any future negotiations. Don’t be afraid to approach companies with what you and your land have to offer in order to create more buzz about the minerals on your property.

oil drill on a field that is being leased out to a gas company

Don't Rush Into Any Deals

Timing is everything. If you jump too soon at an offer, you may not only miss a better offer from another source, but the company scouting your land may sense your hesitancy and give you a bit more incentive to accept their offer.

A word to the wise though, if a great offer comes your way that stands apart from the rest, don’t wait too long and let it pass you by. If you need guidance on choosing when to say yes, you could always look for outside help, which leads us to the next suggestion.

Step 2: Hire a Lawyer

Consider hiring a lawyer before signing anything official with a company for your land leasing. As they say, the devil is in the details, and having a lawyer who specializes in this type of contract could save you from making an agreement that would end poorly for you and your land.

That being said, also take into consideration the fact that hiring a lawyer early on is a potential drain on your pocket. By doing your research thoroughly and narrowing down your list of potential offers, you can save yourself a substantial amount of money in the long run.

Step 3: Check out Comparable Properties and Deals

field with natural resources that could be leased out

Not only should you check out more than one company to see what they think your land’s resources are worth, but it may be beneficial to check out other properties that are being leased near you.

This will give you a good starting point if you are not sure where to begin your research.

This website can give you a good idea of how much oil or gas may be on your land, based on where you are located.

Step 4: Separate Tracts for Separate Lands

A lawyer might be able to help explain the necessity of splitting up contracts for separate pieces of land, but hopefully, we can give you a general idea of why you should abide by this rule of thumb.

Generally speaking, if you own multiple lands that are not connected or that you might consider splitting up in the future, it is a good idea to separate contracts out to one per piece. In the future, this will help avoid any unnecessary complications that might come up if you intend on selling the land. All-in-all, this will help your deal be tidy and easier to clean up should any odd circumstances arise along the way.

oil drills in west texas that are being leased out by a property owner

Step 5: Research, Research, Research

We’ve said it a million times before but it should be said again, you can never do enough research for a contract like this. It may seem daunting to face down mineral leasing and all the legal and practical issues that come along with it, but your struggles could pay off in a huge way. The best way to ease stress or confusion about mineral leasing is to ask questions and try and find answers to them.

The more that you know going into a contract with a company, the better off you will be no matter what. In any case, you can’t be over-prepared for negotiation, even if it may seem like overkill at times. 

We hope that this was a good start to your look into mineral leasing! Be sure and check out some other resources down below and let us know any tips for newcomers in the comments below on this post!

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