Hi Everyone, I have a lease offer from EQT Production Company for Oil & Gas interests on 6 contiguous parcels total of 31 gross acres located in Smith Township, Belmont County, OH. The offer is not specific as to what my Net Mineral Acre ownership is, so I can’t really calculate the value of what I own, or whether this is a fair value offer. There is a $1,000 per NMA signing bonus and promise of 15% royalties on “amount realized” which I’m just guessing is after all costs up to and including the kitchen sink are deducted from any gas/oil sale proceeds. I would appreciate any guidance before spending any money on professional help. How do I find out what I really own in terms of net mineral acres would be a great place to start. Thank you all! Don
Ask the landman in an email so you have a written response. He should have the that information for each tract and be able to tell you if you own the same fractional interest in each tract. If your NMA is extremely small, you may want to negotiate a flat bonus for the lease.
Thanks, that’s sound advice to get everything in writing. We’re supposed to talk today by phone, but I’ll be sure to put any questions in an email to him afterwards, confirming our conversation.
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Donald-
First, when a landman calls or visits you they are supposed to identify themselves as either a company (EQT) employee or a lease broker. If the latter, there are some disclosures they have to give you according recent legislation since a lease is a real estate transaction. They are now classified as real estate agents, sort of!
Second, there is a Goshen Landowner group in Belmont County you should contact for the latest update regarding bonus and royalty. They have good relations with EQT.
Third, once you find out how many NRA you have, the going bonus and royalty, the real issue is the post production deductions and what the lease may say about them. If not worded correctly, you could pay for your share of gas transportation, marketing and processing off the pad. The lease negotiation is when you need a knowledgeable attorney. Everything on the lease is negotiable!
There is a lot of good educational information on the national NARO website. Educate yourself about the leasing process.
BTW, EQT has announced they were doing any drilling in Ohio this year and focusing on WV. They must be starting to put future units together.