Lease · the walk-through
Leasing your minerals, step by step.
With a lease you keep the minerals and let a company drill for a bonus now and a royalty if a well produces, on terms that can hold the lease for decades. With a sale the interest changes hands for one payment. Here is how a lease goes, from the first letter to the first royalty check.
- What you keep
- Ownership. A lease grants the right to drill for a set time; the minerals stay yours.
- What you are paid
- A bonus per net mineral acre at signing, and a royalty share of production if a well is drilled and produces.
- What to read first
- The deductions clause next to the royalty, and whatever holds the lease past its first term.
The eight steps
A proposal arrives
What happens: an operator, a land company working for one, or a buyer like us wants the right to drill under your tract, usually because acreage is being assembled nearby. You get: a proposed lease, often with a cover letter and a deadline. The deadline is theirs, not yours.
Find out what you own
You do: check whether the interest is really yours, how much of it, and whether it is already leased. A free screening answers that from the county records. Why it matters: a lease signed by the wrong person, or over minerals already under lease, pays nobody.
Read the terms
You do: go through the eight things every proposal must state, listed below. Read the royalty together with the deductions clause, and find what holds the lease after its first term. You get: from us, a plain summary of a proposal’s terms on request, whether it is ours or someone else’s.
Ask, compare, negotiate
You do: ask what is excluded, whether the company will operate, hold, or assign the lease, and what happens if nothing is drilled. Compare proposals on the same terms. Have the document read by an attorney who practices West Virginia oil and gas law; a lease can run for decades.
Title confirmation
What happens: the company confirms from deeds, wills, and estate records that you own what the lease covers. The bonus is normally paid only after this step, and it can take weeks, sometimes months, depending on the county records and on estate paperwork. You get: questions about anything the records leave open, and a list of what is needed to close them.
Sign and record
What happens: you sign the lease in front of a notary. The lease, or a short memorandum of it, is recorded with the county clerk so it is public. You get: a complete signed copy. Keep it with the cover letter and the date; you will need it years from now.
The bonus is paid
What happens: the signing payment arrives the way the lease says: by check, or by a bank draft or order for payment that is honored after title clears. Watch for: any wording that lets the company cancel or reduce the bonus after you have signed. The proposal should say exactly when and how you are paid.
After signing
What happens: signing does not guarantee a well. If one is drilled and produces, a division order arrives stating your decimal share, then royalty statements. If nothing is drilled, the lease ends with its term unless something in it holds it. You do: keep the lease, the division order, and every statement; they are the record of what you are owed.
What a lease proposal must state
Any proposal, from anyone. If one of these is missing, ask for it before you sign.
Rights sought
Which minerals, which depths or formations, and which tract or acreage the lease would cover.
Bonus
The signing payment per net mineral acre, the total, and when and how it is paid.
Royalty
The royalty fraction and the basis it is calculated on.
Term
The primary term, what holds the lease beyond it, and any delay rental.
Deductions
Whether post-production costs can be taken out of your royalty, and which ones.
Extension and assignment
Any option to extend, and whether and how the lease can be assigned to another company.
Conditions
What must be confirmed before the bonus is paid, and what happens if a condition fails.
Payment steps
How title is checked, how and when the bonus is paid, and who pays recording costs.
Documents that help, and when
How this compares with the usual ways a lease arrives
Most leases are signed with an operator’s land company. That is often the right counterparty. The difference is in what you are given in writing before you sign.
| Compare | An operator’s landmanA form lease, often with a deadline | A lease negotiatorA service that negotiates for a fee or a share | Fair Mineral OfferA lease conversation that starts with the records |
|---|---|---|---|
| What you are handed | The company’s form lease, written for the company. The bonus is on the cover letter; the deductions are on page four. | A negotiated version of the same form, for a fee or a share of the bonus. | The eight things every proposal must state, on one page, before the lease itself. |
| Before any terms | Nothing. The letter assumes the minerals are yours and unleased. | Usually your documents, up front. | A free screening: whether the minerals are yours, how much, and whether an older lease still holds them. |
| Deductions and what holds the lease | In the form, and rarely explained. Both decide what you actually net. | Negotiated, if you know to ask. | Stated plainly, next to the royalty, with what extends the lease past its first term. |
| The bonus | Usually a bank draft or order for payment, honored after title clears, sometimes cancellable. | Depends on the lease negotiated. | When and how it is paid, in writing, and whether anything lets the company cancel after you sign. |
| Time pressure | A deadline on the letter, which is theirs. | Their process and the operator’s. | None from us. A lease can run for decades; the proposal waits for your attorney. |
| A proposal you already hold | Theirs, to sign or not. | Reviewed, for the fee. | A plain summary of any proposal on request, ours or someone else’s, with what to ask before signing. |
| Works best when | The operator is drilling your unit now and the terms are already fair when read in full. | You have a strong position and want someone to negotiate it. | You want to know what you own and what the terms mean before you sign anything. |
How owners usually arrive here, and where it goes wrong
Composite situations drawn from the questions owners ask, not client cases.
The landman at the kitchen table
A form lease, a bonus that sounds like a lot, and a deadline of a few days.
Where it goes wrong. Signing on the bonus alone. The deductions clause and the holding clause decide what the lease is worth over its life, and the draft can be cancelled if title does not clear.
What helps. Read the eight items above, especially deductions next to the royalty. Have it read by an attorney. The deadline is theirs, not yours.
Held by a well from the 1970s
A shale company wants to lease, but an old shallow lease with one marginal well still covers every depth.
Where it goes wrong. Signing a second lease over minerals someone else already holds. It gives the new company nothing and clouds the title.
What helps. Check whether the old lease is really alive, ask for a release or a deep-rights release, or sign a top lease that takes effect when it ends. The better-offer section walks through each.
Cousins with three different leases
Five co-owners of one tract. Two signed with one company, one with another, two never answered.
Where it goes wrong. Each co-owner can lease their own share, but a tract leased in pieces, on different terms, is hard for anyone to develop, and the unsigned shares stay unleased.
What helps. A screening that lists every owner of record and their share, then one conversation instead of five. The family tree is for exactly this.
Signed, then silence
An owner signed in March, the bonus never came, and nobody answers the phone.
Where it goes wrong. A draft conditioned on title, and an estate two generations back that was never probated. The company cannot confirm who owns the minerals, so it does not pay, and often does not say why.
What helps. Estate papers before signing, and payment terms that say exactly what happens if title takes longer than expected. Our proposal states both.
Comparing two proposals
Already leased and holding a better offer?
While a lease is in force, the company holding it has the exclusive right to the minerals it covers. Signing a second lease over the same minerals gives the new company nothing: it breaches the first lease, clouds the title, and the bonus will not be paid until that is sorted out. There are four legitimate routes to the better offer.
What an owner cannot do is pick a different lessee because of price alone. The lessee can assign the lease to another company without your consent unless the lease says otherwise; you have no matching right. Whether a particular lease has ended is exactly the question for a West Virginia oil and gas attorney with the lease and the production history in hand.
Questions owners ask
Does a lease mean they will drill?
No. A lease is the right to drill, not a promise to. Many leases expire with nothing drilled, and the bonus is yours either way. Nearby permits on the map tell you how active the area is; they do not guarantee a well on your tract.
When do I get the bonus?
Normally after the company confirms title, which can take weeks or months. The proposal should say exactly when and how it is paid, and whether anything lets the company cancel after you have signed. If it does not say, ask before signing.
Can I lease and sell at the same time?
They are separate decisions with separate paperwork. A case can explore both, but each proposal states its own terms and you are never asked to accept one to receive the other.
Do I need a lawyer?
Nothing here is legal advice. A lease is a long-lived contract, and having it reviewed by an attorney who practices West Virginia oil and gas law is a reasonable step before signing any lease, including one from us.
An operator sent me a lease. Does that mean they want to drill my tract?
It means they are assembling acreage somewhere nearby. Check which district their recent wells are in on the operator page, then read the terms above before signing anything.
I am already leased and someone offered more. Can I switch?
Not while the existing lease is in force; it gives that company the exclusive right to the minerals it covers. You can sign a top lease that takes effect when the old one ends, check whether the old lease has actually expired or terminated and ask for a release, lease depths the old lease does not cover, or ask the current lessee to release or assign. The section above walks through each route.
What would a lease from you look like?
It states the same eight things listed above, and the conversation starts by explaining what we would do with the lease, including whether assignment to an operator is contemplated. Our role is disclosed before any terms are discussed.