A couple of years ago I moved to WV and bought 3 acres of property, the deed does indicate we have mineral rights.
Last week I and a few neighbors were contacted by a company that claims there is a lease agreement from 1953 they want to amend with us. Supposedly, this agreement was for storage under our property.
First, this is the first any of us have heard about this. Where would we be able to find a copy of that original lease?
Second, Is it possible we should have been receiving royalties from the company for that original lease?
Third, it seems they intend on removing what is stored. They are offering us each a $200 signing bonus and there is something about royalties of 12.5%. I’m confused because I was told we would receive 50% of the royalties. How can I get 50% and each of the other 3 neighbors get 50%?
Fourth, they will supposedly be drilling a horizontal well to get to it. It’s my understanding that well will not be on our property.
We plan on meeting with the company representative and I’m trying to educate myself as quickly as possible. Any recommendations as to the best way to do that?
Thanks in advance for any advice!
Ask the company that contacted you for a copy of the original lease. It may also have been filed in the county or a memorandum of lease should have been filed. Not all counties are digital back that far, but the actual books in the county courthouse should have the info.
Based upon the lease, you can see if there was any production by going to the WV oil and gas commission and looking up the property. If there was storage, then you would need to contact the operator to get the information.
The first 12.5% is the a 1/8th royalty. Can’t answer your 50% question without reading the original leases for all parties. An attorney can help with that part.
If they are drilling a horizontal well, then that implies that this may not be “gas storage” and they are actually going for the original gas in the reservoir. Do no assume that the company rep has your best interests in mind-they are working for the company that hired them. I rarely would amend an earlier agreement without getting an attorney involved. You may be able to get a better deal now. A good oil and gas attorney is working for you and should be able to clarify any questions.