I have a question? I wanted to know if I was in the deal making process with a landman and the oil company for which he's representing, if I was trying to get a deal to lease my mineral rights for 3/16 but they keep trying to offer me 1/8 of every barrel, what do I do? and also is there a way that I don't have to go with this oil company and find another one that I can do business with? and have them competing for my minerals, so I could receive the best deals? is this possible please respond
Keith, I just got through going through that. Got an offer in the mail for one amount, had a lease on its way in the mail from another group for another amount, then contacted someone I had done business with in the past and in the end they were all competing for the final outcome. So, yes, it’s not only possible, I’m sure it’s happening hourly. It can be nerve-wracking, but worth it in the end. Just don’t be too greedy and wind up with nothing! Also, some members of my family have gone with one company when I have gone with another, with totally different negotiations. Hope this helps. Good luck!
Do some research for who is currently drilling in your area. Lease money is "peanuts" compared to royalty from a well. Go for the least lease time period and only for first term, no extensions.
Keith,
As a professional minerals manager, I do these evaluations and negotiations on a daily basis. Please pay attention to what Ron Bahm says. He has an excellent grasp of the guts of minerals management. Keep his "peanut" sentence in the forefront of your mind at all tines during lease negotiation or you will regret not doing so in the long run.
Hi Keith -
If you'll tell me where your land is, I may be able to tell you who is leasing around you.
If you want to do that privately, accept my offer of friendship on The Forum and send me the legal description that way.
Charles
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
How do I negotiate the best price for my minerals? and is it really a good thing to have more than one company competing for my minerals? I have 40 acres and there's one company thats trying to push their way in as quick as possible to try to make us sign their contract so they can get started right away, but I think this is to fast and plus they are not offering us the contract that we want and it's 8 of us and the contract is for 1/8 of every barrel and we are looking at 3/16. What is the best way to deal with this company?
Gary L. Hutchinson said:
Keith,
As a professional minerals manager, I do these evaluations and negotiations on a daily basis. Please pay attention to what Ron Bahm says. He has an excellent grasp of the guts of minerals management. Keep his "peanut" sentence in the forefront of your mind at all tines during lease negotiation or you will regret not doing so in the long run.
Gary L Hutchinson
Minerals Management
Linton Tomlin said:
Keith, I just got through going through that. Got an offer in the mail for one amount, had a lease on its way in the mail from another group for another amount, then contacted someone I had done business with in the past and in the end they were all competing for the final outcome. So, yes, it's not only possible, I'm sure it's happening hourly. It can be nerve-wracking, but worth it in the end. Just don't be too greedy and wind up with nothing! Also, some members of my family have gone with one company when I have gone with another, with totally different negotiations. Hope this helps. Good luck! THanks, so did all this work out well for you?
Keith, listen to Ron and Gary, they are right. And so are you. Don’t let them pressure you. They’re your mineral rights! In that area I wwantot take less than 1/4, 25%, and a 3-year lease ONLY, no extensions. If you want to talk to me privately, accept my friend request. Good luck!
Keith,
It is certainly reasonable to ask for a shorter lease term, higher royalty and other things when a land man is asking for an oil and gas lease on the minerals. I suggest you do some research with the other members on this site that have offered help, but some areas to discuss would be a pugh clause, no PPC's-post production costs paid by lessor (you), a drilling commitment to earn an the lease term, "XYZ exploration will cause a well to the minimum depth of the (producing formation in your area) to be permitted, bonded and drilled with in 18mths, to earn an additional 3 year lease" a clause that your land must be included in the drilling unit, a clause that any water well drilled on your land becomes your property after exploration is over. These are just some suggestions, a pugh clause is normally for larger tracts of land. Private message me if other questions and also what state and county, township the minerals are in.
Bertram W. Sippy IV
Keith -
Sorry to take so long getting back to you. I took a tumble a few weeks back and ended up with 15 stitches in my forehead - just now getting back up to speed.
The following link will allow you to download what I was able to discover about the area around Newton, Newton County, Mississippi:
http://www.hightail.com/download/elNJdFdZeDM3N0NxV2NUQw
There are several very old Dry Holes drilled around the town of Newton. And two wells drilled 3 or 4 miles to the Northwest in or about 2011 that are listed as Oil Wells, but I could not locate any production information for them.
Most of the production in your general area is 10 or more miles to the southeast of Newton. Again, I was not able to locate any production figures, but they are producing from several different formations, which is a good sign.
Perhaps you could contact some of those companies about your lands.
Hope this helps.
Happy New Year -
Charles
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
If I'm negotiating with a company but they are not interested in giving me nothing what I want out of the deal and they said they are giving me a deadline and If I can't come to their agreement they said that they will go to some state board and try to pool me in and I may end up with nothing, so can they do that are is it a bluff?
Gary L. Hutchinson said:
Keith,
As a professional minerals manager, I do these evaluations and negotiations on a daily basis. Please pay attention to what Ron Bahm says. He has an excellent grasp of the guts of minerals management. Keep his "peanut" sentence in the forefront of your mind at all tines during lease negotiation or you will regret not doing so in the long run.
Gary L Hutchinson
Minerals Management
If I'm negotiating with a company but they are not interested in giving me nothing what I want out of the deal and they said they are giving me a deadline and If I can't come to their agreement they said that they will go to some state board and try to pool me in and I may end up with nothing, so can they do that are is it a bluff?
If they do forcibly pool you, you will be on the same terms as the land owners around you that signed the other leases. "End up with nothing" is not true. What State is this going on in? It is not normal in any way in the State of Texas for exploration or land companies to be of this disposition. Are you asking for something that makes the development uneconomical? What terms are they offering you and where are you at? You may want to compromise if you have a certain specific area that is more important to you.
I live in Texas but the land is in Mississippi and they need 80 acres to drill and the land owners around me owns 40 and we own 40 ourselves and they have signed their leases and we haven't. Is it possible for them to force pool in Mississippi>
Bertram Sippy said:
If they do forcibly pool you, you will be on the same terms as the land owners around you that signed the other leases. "End up with nothing" is not true. What State is this going on in? It is not normal in any way in the State of Texas for exploration or land companies to be of this disposition. Are you asking for something that makes the development uneconomical? What terms are they offering you and where are you at? You may want to compromise if you have a certain specific area that is more important to you.
Do you own 100% of the mineral rights on the 40 acres that they want? Have they leased other areas around you? If not they would likely need more than 50% of the minerals in the drilling unit to force pool. I do not know Oil and Gas Law in Mississippi, but you can contact the State agency that regulate oil and gas mineral wells in the state and talk to someone about this. What is the sticking point to signing a lease on the property for you? Have they identified a target formation or depth?
I would wager that the 1/8th 12.5% royalty is the true sticking point. Of course if you got 12.5% and never paid any PPC, marketing costs or anything but taxes, you might be well ahead of the curve. I know some people leased for 20% who do not even have a 10% effective royalty.
they are in the process of leasing areas around me because other landowners have already signed their rights away. so is it possible for them to force me in?
Bertram Sippy said:
Do you own 100% of the mineral rights on the 40 acres that they want? Have they leased other areas around you? If not they would likely need more than 50% of the minerals in the drilling unit to force pool. I do not know Oil and Gas Law in Mississippi, but you can contact the State agency that regulate oil and gas mineral wells in the state and talk to someone about this. What is the sticking point to signing a lease on the property for you? Have they identified a target formation or depth?
Not likely, contact the state agency that handles Mississippi and explain the situation. They may decide to permit another location near yours instead. If they really have good geology on your land, I would expect they don't want to risk a dry hole. If this is a vertical conventional oil well, location is everything, if it is a horizontal shale well, they can just move it. Find out what it is they are targeting.