I’ve had an offer in section 23 and I’m finding that our mineral rights were passed down and were split into 1/3 each. A land man wants to lease them. He has been negotiating with me and my family members separately. I took a week to have an attorney review the contract to see if there was anything that could be negotiated and revised since he was strict on the price of the offer. Then he went and negotiated a higher price with my other family. I touched base with him to see if that was the offer now and he said he will see what he can do. My question is if I own a 3rd of the exact location he is leasing from them doesn’t he kinda have to lease from me as well if they are drilling? It seems like it would be that way. I’m really new to this so apologies in advance.
If your mineral acres are within the spacing unit, the land man or operator will have to either sign a lease with you or wait for a pooling order where lease terms will be set for you by a judge. If you and your family members can stick together as you negotiate the terms, you will have more leverage for getting better terms. The initial offer is almost always low. Finally, if you do come to terms, never give the lessee a signed lease without a valid check in hand. I have found that this can be accomplished through your attorney. You give him the official signed copy of the lease and he accepts the check on your behalf and hands over the lease agreement. Good luck as you move forward.
Out of curiosity, how much did you pay the attorney and what provisions did he make?
$395
He made several. Changing the 3/16 Net to Gross Depth clause Shut in clause Pugh Clause Commencement of well Title and well information Assignment No Warranties
All rejected.
In cases where the lease is not able to be fairly negotiated, then I wait for the pooling as it has its own benefits.
With all due respect to the attorney involved, if one puts in clauses that will never fly, then you’re just wasting time and money. Except in the rarest of circumstances, no oil company is going to give you title and well information.
While it is certainly proper and right to exchange your signed lease for a Cashier’s check (proven/good funds), it doesn’t take an attorney to do this. Simply tell the Lessee (the oil company or lease broker) this is your expectation prior to even getting into a conversation/negotiation. If they act like their feelings are hurt, ask them if they pay at the check out stand before walking out of the grocery store.
While it’s a little vague as to what “title and well information” mean specifically here, I’ve often gotten my specific title background/history from a Lessee as part of the negotiation, and some type of limited notices such as notice of drilling start and well completion and/or first production. (Sure, they’re mostly not going to hand over the title work involving other people in the unit.)
These type conversations all turn on multiple variables operating at the same time. Simple items that can be no more than a tickler on someone’s calendar, really are of little consequence at all when “they” want your lease. It’s kind of hard for some landman to argue otherwise when there is no real burden to the request. In these situations, the real issue is that the broker dude doesn’t want to tell his boss that he had to agree to something with a teeny amount of “hair” on it.
Im a retired attorney and I often disagree with most on here that say you have to hire an attorney to negotiate your leases for reasons like this. Not to be rude but you essentialy wasted $400 when you could have asked them for a depth and pugh clause. The rest of his changes are a bit absurd, guessing he did this to get more billable hours and drag out the process. I dont know how many acres you own, hopefully its more than 20 and you can still get the offer that your family members did. If you only own a couple acres, most companies are just going to move on bc its not worth their time dealing with your attorney and his demands to pick up a few acres and will just let you go to pooling so you have to accept the terms of the pooling order.
Bob- you need to understand that the majority of folks on here have very little to no experience. That is why they are here. When someone asks how to negotiate a lease, they need to pay for help. They don’t know what a Pugh clause or depth clause is. And they should not listen to old landmen or retired lawyer.