As a landowner who has recently been contacted about leasing the mineral rights to your property, you may be excited about signing the contract and enjoying the profits. At Kelsey, Kelsey & Hickey, PLLC, we often work with property owners who want to enter into discussions about mineral rights leases.
Here are two questions to answer before you talk to someone about leasing your mineral rights, per Mineral Wise.
Who contacted you?
You may assume that the person who reached out to you represents an oil company. However, rather than an employee, he or she could be an independent contractor working for the company or a broker or leasing agent representing a land brokerage firm.
While the oil company representative will have the company’s goals in mind, the independent contractor may be focused on gaining a significant commission through the terms of your lease. Some people sign leases with landowners and then “flip” them, selling the leases to oil companies.
Ask for the individual’s name and the name of the company they are associated with, if any, so you can do an internet search and find out who you may be dealing with.
Who else was contacted?
If there are other family members who have an interest in the mineral rights, the person who called you may have contacted each of these others individually. He or she may attempt to negotiate separate leases with each of you. By banding together or creating a business entity and negotiating a single lease, you may have greater bargaining power.
For more information about mineral rights negotiations, please visit our webpage.