quote:
1/5 royalty is the minimum they can offer under Louisiana Law. If you sell the land you will still retain mineral rights for 10 years, if there is no production in that 10 year period the rights convey to the new owner.

Um....no on the 1/5th minimum by LA law. If he sells the land and wishes to retain mineral rights he must insert a clause in the deed noting that he retains his mineral rights, and then he would have ten years of time to lease, sell, or do what he wishes with his mineral rights. Dry holes and producing wells can extend a mineral servitude past its current ten year period, along with continual operations on contiguous tracts over the years. That won't come into play on a 10 acre standalone tract though.

This post was edited on 6/12/13 at 1:05 pm

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Posted by cmlsu

Baton Rouge, LA

Member since Aug 2011

659 posts

Posted on 6/12/13 at 1:18 pm to TigerDog83

Yes, we will try to reserve mineral rights at the time of a sale. The lease would also be transferrable to a new owner if we convey the rights but some buyers might see that as hinderance. For example, somebody wanting to buy and build a shopping center but thinks twice because of fear somebody may put a rig in their parking lot down the road.

We didn't want to narrow the field of potential buyers by already having the land leased. Some buyers may wish to have the mineral rights for various reasons.

Now, if the oil company comes back with anything that looks "legit" then we would definitely reconsider. We just don't think it's worth putting any kind of encumbarance on the land for $1,500. If oil is in the area or the companies really want to drill then I can only assume they will be knocking down our doors.

Regardless, we're going to try and reserve mineral rights when selling but if a purchaser wants them, which most will, we can at least use this info as a negatioting tactic.

This post was edited on 6/12/13 at 1:23 pm

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