Oil & Gas lease offer for a recreational property in SW Miss. - what to look out for

Check out mineral rights. Mississippi is screwed up when it comes to mineral rights as they are perpetual and most rights were bought uo years ago by big companies who will never let them go

$50. I got $5000 an acre back in 2009.

I’d hold out for a lot more per acre and I’d rather 1/8 royalties before any production costs etc .... instead of 3/16 after production cost.

Most of the leases we have are 1/8 or 3/16 royalties before costs. Also have a clause that if the locate a site on your land they have to restore it to its former self or as close as possible.

They pay for any damages etc... they cause to your land


My dad refused to sign a lease in 2011 for $2500 an acre and they threatened to go ahead a drill I. His section without giving him $$$$ per acre. He smiled and said go ahead I’ll make more in the long run if you bring in a well.

There is tons of good information out there do your research also make sure they specify how deep and what play (shale) they are drilling into looking for oil/gas.

Companies or land people are trying to get you to sign at the least amount favorable to them. It’s a negotiation. You want to specify that if they don’t bring in a working well or if they don’t produce your section within 3-5 years the mineral rights revert back to you and also make sure your lease does not give them rights to anything other than minerals and like I said earlier they are responsible for any surface damage

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$50. I got $5000 an acre back in 2009.

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I think we’re talking about different things. I bought the land for $2500 an acre, no way anyone is going to lease it for $5000 an acre. They could buy any land they want in the county outright for that much. The $50 per acre just gives them the right to explore.

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think we’re talking about different things. I bought the land for $2500 an acre, no way anyone is going to lease it for $5000 an acre. They could buy any land they want in the county outright for that much. The $50 per acre just gives them the right to explore.

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In 2007-2009 people in louisianaxwas getting $5000-$25,000 an acre because they had just discovered the haynesville shale and new fracing was able to open up more oil and gas drilling.

I’m saying the folks in those areas that signed (2004-2006) when companies first came around offering $50-$150 an acre got screwed by not waiting and finding out why that area was all of a sudden a hot bed for leasing


I know several people in their 20’s that became instant millionaires just because the owned land and knew not to sign the first offer.

They always try to get the largest land owners first then work down the the ones with less acreage. I’d have probably signed a lease for a lot less than $5000 but my family has several leases with wells and my dad has been teaching me since the 80’s about oil/gas and timber. Do the research on the haynesville shale and see what happened in northwest Louisiana and east Texas in the early 2000’s


Could be a new formation that a company has discovered and that they have the equipment and technology that now allows them to drill and get to the gas/oil and make a sizable profit.

Has anyone been doing testing around ???? They usually will do testing to see if they can detect anything underground and then get a good idea what and how far down before deciding if it would be profitable to lease and drill or just lease so no other company can come in and try to develop the area. This is why it’s important to specify I. Your lease that the rights will revert back to you if they don’t drill and/or bring in a well BBC within a given time frame. Otherwise the original company that leases your land will hold onto it for however long they want to

You may own the land and not the minerals. If you do own the mineral right take not less than 1/4 royalty.

Demand that any environmental impact be restored to its original condition. If there is any value in timber that is/will be removed ask for compensation.

More royalties is way better than higher land lease.

“No warranty” in your lease.

If I were you I would first figure out what I owned.

I would try and negotiate a higher bonus and royalty just because.

Ask them what they want to do, what are they after.

Ask them about surface use, if they make a gas well they will need a pipeline, oil possibly pipeline or all weather road.

The Haynesville /bonuses, etc from 2008+ will likey not apply possibly ever again except somewhere like the HA. I’ve recently heard of $2500/ac bonuses.

Pre Haynesville in NWLA standard Cotton Valley/ Lower CV leases were $150-$250 per net acre and the highest royalty percentage one could negotiate up to 1/4, standard was around 1/4, 1/5 or 3/16. 3 yr term.

I know shite about SWMS.

Pugh clauses, worth gold in the HA on shallow, producing leases when the HA deal broke loose.

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My dad refused to sign a lease in 2011 for $2500 an acre and they threatened to go ahead a drill I. His section without giving him $$$$ per acre. He smiled and said go ahead I’ll make more in the long run if you bring in a well.

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Yeah bonuses in the haynesville are around $500-$1000 an acre these days. You can’t compare the crazy land rush of 2008 to anything else in oil and gas leasing as we won’t see that ever again. This is likely a conventional shallow play if I had to guess and they’re probably after Wilcox or lower Tuscaloosa in that area. Small trap and probably won’t bump the royalty or the bonus much although you can try. If he owns a big enough tract and won’t lease they’ll go somewhere else. Riding down wells without leasing in Louisiana and Texas is not for the faint of heart. I saw a lot of people do it in 08-09 and get under wells that never paid out and haven’t made a penny off of it to date. Going unleased equals working interest in Louisiana and not everybody can handle that. Try that in Texas and you risk getting cut out of the unit as most people know Texas is very operator friendly. I’m not up to speed on mississippi forced pooling but he’s better off asking some questions and getting some no cost language, depth clauses, and other standard protection versus trying to act like Weyerhaeuser or the like.

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They’re offering $50 dollars per acre

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might be for an option just to tie him up. I agree with getting an atty or someone to consult that knows their shite on the area.

Go with a 1/5 royalty $100/year per acre with Pugh clauses. Lots of other smaller things to consider, but take some money while there is money to take with the bonus payments. Likely they will not produce anything and are just prospective leasing with the intent to flip it.
Most larger production companies will not touch Mississippi right now. The TMS has to have oil around $100 to be profitable at best. Don’t lease more than 3yrs.

Get an oil and gas attorney to help you out. The Hiedelburg group around Laurel used to represent a bunch of landowners around Laurel