Back in March I was notified by Antero that me and around 30 other of my family members currently held the mineral interest for 105 acres in the New Milton District, on the waters of Brushy Fork, Doddridge Co. This was my great grandfathers land. They offered me $1200 flat per .97345 net acres with 15% royalty. Me not sure what to do signed it. My sister on the other hand penciled in that she wanted 500 more and they gave it to her… So now here is the question… I just got an amendment in the mail saying they found another parcel only another 10 acres but not offering to pay anymore for it, just changing the map and adding a parcel with more acreage. Can I at this time ask for more money? And if so does anyone have any idea on how much more I should ask for? I live in Arizona and have no clue as to what the land even looks like.
Yes, you can ask for more. It's a new contract for a new tract of land. Do you own all of the 10 acres yourself as one tract, or is the 10 acres your share of a larger tract? Or do you own a share of the 10 acres? The more you own, the more you can negotiate. If you owned all of the 10 acres, and it wasn't part of another tract, I'd ask for $2,400 and 25% royalties. They'll negotiate it down from there, nobody's paying that here in WV, but there are parts of the country where 25% royalties are standard, and there are parts of WV where $2,400 is low.
BTW, if they ever ask you to sign one lease for multiple tracts, say no. Keep things simple. Otherwise, they might develop one tract over here and keep the other tract under contract without developing it (you won't be getting any royalties from the second tract), just because the undeveloped tract is on the same lease as the first. If they're adjoining, you can make an exception.
Some free advice from a landman turned attorney: get a No Warranty of Title clause, an Indemnification clause, and try for a Pugh clause. If you share the minerals with other people, you're less likely to get a Pugh clause unless you all request it at the same time. There are other changes I would make to a lease, but they are lengthy, detailed, and situation specific, so I won't get into them here.
Another question for you… I guess the others that I share the 115 acres with have all signed the amendment without asking for anymore money for the 10 extra acres. A representitive from Antero Resources have contacted my aunt and asked her to have us sign as we are holding up them drilling. What is the best way for us to respond to them and how would we ask for more money for the 10 extra acres? Can we ask it all split between the 3 of us?
When you say the 3 of you, do you mean your sister, your aunt and yourself? And all 3 of you have not yet signed for the extra 10 acres? You each could ask for the $ per acre (your share of the net mineral acres on that 10 acres) same as before. If they really want to drill they'll be more willing to give you some extra money. However sometimes there are things in these amendments you wouldn't want. That is when it is good to have an attorney read through the document. An oil and gas attorney familiar with things in WV. But remember you have something (the gas or oil) that they need so don't be greedy but remember it is a business for them. As Kyle said, the larger the acreage and ownership %, the more you can ask for but if they need that 10 acres they should be willing to give you something for it.
Thanks Nancy! It is just myself and my two sister that haven’t signed yet. There is only the change in the amount of acres and parcels. I’m not sure how to go about asking for more money. Should I try calling the man contacting us or send a letter? Not sure the best way to handle it… Also why can’t we ask for all of the acres since nobody else did? We got 1200 per acre and 15% royalties. Has that changes at all since last March?
I expect it would be going up, especially since they seem to need your extra 10 acres!
Is this 10 acres adjacent to the other tract?
You can only ask for your portion of the 10 acres, but if all 3 of you stick together and have just one of you talk with the landman, it might be more effective even if each of you needs to sign. I have found it works well so say that you want something that all of you will be happy with. You could follow Kyle's suggestion and ask for $2400 an acre (your share). Again, if they really want to drill, they need your signatures. How much of the share do the 3 of you own?
Probably better to call the landman but ask him to send you something in an email so you can share it with your sisters. Always good to have things in writing.
There is a lot of activity going on in Doddridge now so they must be getting good wells. They are hoping your 10 acres will help them get one.