Leasing Your Mineral Rights (???)
 

Drilling for natural gas is huge right now, in my area. These people want to lease the mineral rights on my land, for a signing bonus of about $1,000. Royalties later, if applicable.

What's the catch? I'm naturally distrustful. I also know that a dry well is a liability, not an asset (plugging wells is expensive, but not as expensive as the fines); so I don't want any part of the risk in this venture. However, it appears that they want to hand me $1,000 for doing nothing.

That sounds too good to be true. There has to be a catch.

I sure could use that $1,000 though. My neighborhood negotiated a group deal, so supposedly this is a better price than I could get on my own.

Anyone have any experience with leasing mineral rights?

We've done it, but each state is different as far as protections go...

I inherited a bunch of teeny rights for oil from some remote cousin's pig farms in Oklahoma. My older sisters take care of the details, but I sure enjoy those monthly checks.

The pipe they stick up your ass?

I have a friend who leased out the oil rights for land he has in Louisiana. He doesn't do a thing but cash the checks. Seems to work for him. Oh, the catch is they make more money off of it than you do. However, you don't have to pay for employees, infrastructure, etc.

It would seem to me that if the neighborhood association (or whatever entity) has already negotiated with these people, that someone had to do some verification that they're on the up-and-up. Is there any way to talk to the people who negotiated the deal, maybe get a copy of the actual contract you'd be signing beforehand?

If you don't, they just take the gas under your property through the well next door.

My parents own the mineral rights (but not the land) for some acres in Texas and are currently getting monthly checks from the company for their oil and gas royalties. I'll ask them about some of the details and let you know any catches they avoided or whatever. They're smart folks so they go over all the smallest details in their financial happenings.