We just received an offer to lease and I am pretty clueless as to how to find out what the fair market value is. The company has has offered $450/acre which I assume is a low ball offer. I have downloaded a guide to negotiating leases and I think I have a pretty good handle on what I need to do and ask for in other areas. Our counteroffer is where I'm running into trouble. Oh, it is necessary to get a lawyer involved? It seems to me that the cost may very well eat up whatever we wind up getting paid. Or do lawyers who do this usually charge a set fee?
Hello Bernie, There is a topic on this I read it a while back, somebody was asking the same question, that person lived on FM 1372, where I do. He was told to think about the damages the drilling will do to your property, that is what you need to consider in your amount per.acre. Like after its all done, will you have tanks placed on your property, a haul road those tanker trucks will use to remove oil from the tanks. How much will you lose in property value if you where to sell your property with all this on it. try and re-coop that with your fee, once its done its done and there is no going back.
This is just what I gathered from the other topic, I hope it helps neighbor.
If you own 1/8th of the mineral rights, which was standard in all deeds prior to 2007, and knowing that Madison county is sitting on top of sea of hydrocarbons...and unless you are just plain starving...say NO! There is no way to come close knowing what the fair value of the mineral rights might be.
Also new to forum... have mineral lease from this Spring but after extensive searching, can't find any records or reports on which wells have been placed, production or royalties paid. Many of these posts are outdated... any source for verifying facts? Hate to rely on oil agent for info! Thanks
You dont need an attorney in most cases. Pugh clause, surface damage clause, oil and gas only, and a good royalty can make a fair lease in most cases.
Im not sure what Mr. Ross is talking about with all the 1/8 mineral stuff. Let me know if you need help. I own surface and minerals in madisonville and have clients leasing and buying in Leon.
I forgot to mention, but the advice on getting a lawyer so that you are adequately reimbursed for storage tanks, roads, property damage, etc. cannot be understated and can run into the hundreds of thousands of dollars.
Jonathan Weaver said:
Hello Bernie, There is a topic on this I read it a while back, somebody was asking the same question, that person lived on FM 1372, where I do. He was told to think about the damages the drilling will do to your property, that is what you need to consider in your amount per.acre. Like after its all done, will you have tanks placed on your property, a haul road those tanker trucks will use to remove oil from the tanks. How much will you lose in property value if you where to sell your property with all this on it. try and re-coop that with your fee, once its done its done and there is no going back.
This is just what I gathered from the other topic, I hope it helps neighbor.
I got the 1/8th royalty "stuff" from a lot of research into royalties that oil companies would pay, and if you are currently held by production at 1/8th because one little well sitting at the far end of the pooled acreage is spitting out just enough hydrocarbons to satisfy the RRC that the well is still productive, the state courts have not side with a lessee to amend an existing lease for a higher percentage greater than 1/8th. Only if the oil company is somehow forced into a new leasing arrangement will you have the time to ask for more, but you have to remember with pooling .22% - .25% in a pooled unit comes out to be a lot less.
Richard Stewart said:
You dont need an attorney in most cases. Pugh clause, surface damage clause, oil and gas only, and a good royalty can make a fair lease in most cases.
Im not sure what Mr. Ross is talking about with all the 1/8 mineral stuff. Let me know if you need help. I own surface and minerals in madisonville and have clients leasing and buying in Leon.
Thanks for all the replies and apologize for the delay in responding. Well, we leased for three years w/ an option for another two. I was looking over the various correspondence and came across this: "You may or may not be aware of but this tract is very close to the Day Dome Field which is not our target formation and we might not be able to utilize the tract for drilling but by only pooling to add acreage. We have learned more about the geology in recent months and are trying to solidify our position."
Now does this mean they aren't really planning to drill?