A royalty owner’s mineral lease agreement generally consists of an initial bonus payment when the lease is signed and is followed by royalty payments, if and when hydrocarbons are discovered and produced on the mineral acreage. Once hydrocarbons are producing on the mineral acreage, the owner will begin to receive royalty payments proportionate to their ownership interest in the acreage. Since the lease will be in effect for the life of the well, the owner should carefully evaluate the operator who will extract the hydrocarbons and drill on their minerals before a lease is signed.
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