Panhandle Oil and Gas Inc. is leasing more than 4,000 acres in the Permian Basin in West Texas to an undisclosed lessee for $2 million in cash plus royalties, the company said Monday.

Oklahoma City-based Panhandle said the transaction is the latest of three since June that combined have generated $3.9 million in upfront cash bonuses, while the company receives royalty payments in perpetuity and maintains ownership of the properties.

“As a result of our perpetual ownership and the right to collect royalties, the value of these mineral holdings is significantly higher than the upfront cash bonuses received, in the same way that the value of any real property is greater than the amount at which it is leased,” said Panhandle CEO Michael Coffman. “We believe this leasing activity clearly highlights the considerable value in the remaining 187,100 acres of undeveloped unleased minerals.”

The latest agreement, which was signed in late December, covers 4,052 undeveloped acres in a 34.5-square mile block in southern Cochran County. Panhandle will post the $2 million cash bonus to its fiscal 2016 first quarter, and it will also receive a proportionately reduced 25% non-cost bearing royalty from all production on the leased acreage.

Under the latest agreement, Panhandle will also have the option to buy back a portion of the lease and participate in up to a 10% working interest (WI) in each unit, after the initial well in each unit is proposed. The company said its full participation would yield an average 10% WI and a 12.1% net revenue interest in the project.

According to Panhandle, the block that contains the leased acreage is prospective to the horizontal San Andres development and is adjacent to the Levelland and Slaughter fields, which have cumulative production from the San Andres reservoir totaling 2.2 billion boe.

A second agreement saw the undisclosed operator begin drilling its first well on Panhandle’s 43.6-square mile acreage block (2,440 net acres to Panhandle), in Texas’ Andrews and Winker counties, in mid-December 2015. The block, located in the Permian’s Central Basin Platform, is prospective to several potential productive horizons. Panhandle said the well “is designed to penetrate and collect data from all the prospective horizons.”

Panhandle said it received a $1.2 million cash bonus for the second lease in June 2015, and will also receive a 25% royalty from all production on the property. Similarly, the company also has the option to buy back a portion of the second lease and participate up to a 10% WI in each unit as initial unit wells are proposed.

“[We] elected not to participate in this initial well and unit, but instead chose to evaluate all data collected from the well to determine the economic viability of participation in additional wells as they are proposed and drilled,” the company said Monday, adding that its full participation “in the remaining 43 square miles of the block would yield an average 7% WI and a 7.5% net revenue interest in all remaining wells in the project.”

The third transaction, also posted to 1Q2016, saw Panhandle lease approximately 970 net mineral acres in Woodward County, OK, to an undisclosed lessee for a $660,000 cash bonus and an 18.75% non-cost bearing royalty.

Panhandle said it still owns 187,100 acres of undeveloped and unleased acreage in 10 states. Of that total, 21,200 acres are in the Permian.