Landowners cautioned about mail offers to lease mineral rights

If you own land, to watch out for too-good-to-be-true offers encouraging you to lease your oil, gas and other mineral rights.

If you own land, to watch out for too-good-to-be-true offers encouraging you to lease your oil, gas and other mineral rights.

Michigan State University Extension (MSUE) has had a several of landowners notify us that they are receiving unsolicited mailings from oil and gas leasing representatives. These are offers to lease “Oil, Gas and Minerals”. The letter offers a cash bonus and very minimal lease terms. The letter also states that if they sign and return the offer, they are also approving the lease of the minerals. However, there is no lease document to review, so the landowner is approving a lease that they have not yet seen which may hold them responsible for a variety of terms.

When you sign an oil and gas lease you are essentially selling the mineral rights for the terms that are laid out in the lease agreement. Would you sell your land surface rights without knowing how or what you are going to be paid?

When it comes to leasing your land for minerals or wind energy development, the devil is in the details of the actual lease agreement. Signing and returning these letters without a review of the underlying lease by an experienced oil and gas attorney can result in a poor lease that lacks, among many things, environmental protections, substantially less income to the landowner and potentially very little input as to what occurs on the property after the lease is signed. Unfortunately, these types of offers, though new to Michigan, are becoming more common around the state.

MSU Extension has extensive free information to enable landowners to educate themselves on leasing of their property of the development of mineral rights. You can find many of these resources on the MSUE oil and gas information website. You can also contact your local MSU Extension office which can help your obtain printed copies.

The next MSUE public meetings to educate landowners about mineral leasing is April 28, 2011 at the Fruitland Township Hall, 4545 Nestrom Road in Muskegon County from 6 to 8:30 PM.

Contact Curtis Talley Jr. at 231-873-2129 for more information.

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