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Mineral Rights Leasing and Lease Banking
Mineral Rights Are Privately Owned |
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In the State of Texas, private land owners also own the minerals,
such as oil and gas, which are below the surface. Therefore,
exploration and production firms, such as Weber Energy, must lease
the mineral rights in order to drill a well.
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Leasing Mineral Rights |
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Mineral right leasing is very competitive. Companies with a good
business reputation, such as Weber Energy, have an advantage and
can often lease mineral rights more quickly than others and at lower
prices.
In order to hold mineral leases in perpetuity, wells must be drilled,
and production must commence within 3 to 5 years, or the rights
revert to the land owner.
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Two Kinds of Profit |
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1.
| Leases can be acquired and then re-sold to major oil
corporations, generating a profit for Weber and its investors
based on the price paid for the leases and a carried interest of
up to 25% on the gross production revenues.
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2.
| Leases can be drilled and production established. In this case
the land owner is paid a negotiated royalty and the net
production revenues are retained by Weber and its investors.
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