Need advice–18 relatives, including myself, have inherited the mineral rights for a 30-acre tract of land in Tyler County West Virginia belonging to my great grandfather; we all signed papers to lease the rights to an oil company five years ago and they are back to renew this lease; they are offering each of us $200 for a 5-year lease; this comes out to $3600 for a 5-year lease on the rights; we are clueless in this matter; does this sound the least bit fair???
200.00 each is peanuts. What did they give you to sign the first time? I would think it was a whole lot more.
PEANUTS…Boy is that right.
They gave us the same $200 each to sign the original lease–regret signing that now that I know better; the original lease agreement gave them an option to renew for another five years which they are now trying to exercise so I’m not sure there is anything else I can do about this now. But I do wonder why they need me to sign these new documents and accept their $200 check. If you have any thoughts to share, they would be appreciated. The company is Antero.
If you are not going to hire an attorney to take care of the negotiating, YOU can negotiate yourself, NO…you do not have to accept the offer. I do not wish to bad mouth these land guys nor the companies, but if you read many of the posts on this site -PLUS- some of the replies from VERY NICE, EDUCATED, HELPFUL legal folks…what you are offered is NOT the greatest contract and designed to help YOU… those sign-on checks are nice, no doubt. I did my own “bargaining” knowing full well that what is ON PAPER is NOT what results in royalties, etc. Trying not to complain too much or appear greedy. I feel blessed I was lucky enough to receive ownership per inheritance. In my case there are TONS of folks who are owners, so royalties are smaller. Ours is Tyler county as well…Muddy Creek. The legal folks on this site are right on the $$$ with the advice given.
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It depends on what fraction of the mineral rights you 18 own. For example if you 18 own 1/10 of the mineral rights under the 30 acres, then your “net acreage” would be 3 acres. The going rate per acre in Tyler county right now is around $2000-$3000 per acre. So you might get an offer of $6000 total ($333 each). If you own ALL the minerals, then you should be getting an offer of $60,000.00 or more! The key is to know what your “net mineral acreage” is–which is calculated by multiplying your fractional interest in the mineral rights times the property acreage. As you can see in your own situation, WV mineral rights under a property can have MANY, MANY owners after being split through inheritance from as far back as the 1890’s. Often back then someone would sell 1/2 or 1/4 of their oil and gas rights to a speculator. The speculator might sell half of that to some other speculator. All the fractional parts would often be split further and further through death and inheritance–which ends up in a complicated puzzle & legal mess for both mineral owners and Oil and Gas companies. ASK the oil company what your “net acreage” is, and then you will understand if it is a good offer or not. You CAN and SHOULD negotiate with the landsman and the company and get better terms on the bonus payment, the royalty percentage and negotiate for NO POST-PRODUCTION EXPENSES to be taken out if they start producing. What they are offering you is their “bare minimum” they are willing to pay.
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$200 is nothing. Don’t rush on the negotiations as whether you hold/sell, the most value you will put in your minerals will be based on how you negotiate right now. I’d advise you to also carefully weigh the Royalty you get as thats actually more important than the bonus. Many operators will try to convince an owner to sign with a high bonus and crap lease, and then these owners find their minerals are worth 1/4 of the price they’d be worth if they had a good lease.
Look for GROSS royalties and make sure you seek professional help if you feel a bit out of your league negotiating.
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emphasized textJust spoke with Mike Butcher, Landman representing Antero, and he gave me the following information: -There are 50 not 18 people receiving leases -my net mineral acreage is .01082 -no drilling was done by EQT but Antero intends to start drilling in 12 to 24 months -whether or not I cash their $200 check, they will proceed based on the original lease which contained the extension clause -the original lease has the royalties listed as 1/8 which will be split 50 ways All this considered, it is it advisable or even worth the time to pursue any avenue other than to cash the check and hope that I someday receive a royalty check, however small
I’d just cash it. $200 for essentially 1% of an acre is actually a very good price. I’ve done a lot of mineral buying and you’re not going to be able to sell a small interest like that for anything close to that. I’d take it knowing that you probably wont receive any royalty checks for years since the ownership is so small
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