This form is an Oil, Gas and Mineral Lease. The lessor grants a right to the lessee to enter and use certain property for the production of oil, gas, and sulphur. The document must be signed in the presence of a notary public.
Texas Oil, Gas and Mineral Lease
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Multi-State
Control #:
US-00577
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Word;
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How to fill out Oil, Gas And Mineral Lease?
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FAQ
If the lease has a 1/8th (12.5%) royalty, that will result in the operator paying 100% of all costs and receiving 87.5% of the revenue. The remaining 12.5% would be the royalty interest in oil and gas paid to the mineral rights owner.
The general rule of thumb for the value of mineral rights in Texas is 2x to 3x the lease bonus you received. For example, if you got $500/acre when you leased your property, you might expect to sell for somewhere between $1,000 to $1,500/acre if you were to sell mineral rights in Texas.
Take, for instance, the Permian reservoirs, which have high potential production. Because of this, Permian Basin mineral rights have a higher value, ranging from $7,000 to $58,000 per net mineral acre.
When it comes to mineral rights, the standard admonition has long been consistent and emphatic: Avoid selling them. After all, simply owning mineral rights costs you nothing. There are no liability risks, and in most cases, taxes are assessed only on properties that are actively producing oil or gas.
Contact Central Records at ims@rrc.texas.gov or 512-463-6800.
As a mineral rights value rule of thumb, the 3X cash flow method is often used. To calculate mineral rights value, multiply the 12-month trailing cash flow by 3. For a property with royalty rights, a 5X multiple provides a more accurate valuation (stout.com).
In Texas, mineral rights are recognized as a distinct legal entity from surface rights and are referred to as mineral estate. The mineral estate can be leased, purchased, or sold.
Primary Term and Delay Rentals The first term is called the primary term. It has a fixed duration as set forth in paragraph 2 of the lease. Generally, it is a negotiated two to five years.
