Legal verbiage question

I sent an email to negotiate my offer, this is what I wrote. “I would like a $500 signing bonus and 20% no cost royalty.”

This is the response I got from the landman:

“The answer I received from management is the best and final offer on these leases is $500.00 flat rate and 18% royalty.” “If you have other language you want to submit regarding the royalty, let me know, otherwise, I will send out another set of documents to cover the increase in royalty.” What if any verbiage should I use? I was going off what a member here suggested as I don’t know much about this and have had to educate myself as I go. Any help would be greatly appreciated, thank you!

If you are a NARO member, then go to their website and search for their suggested OGL form. I am guessing that they may have one or suggested language.

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Ive gone through quite a few leases and each one can be different. in my latest lease agreement, i offerred zero signing bonus for a higher percentage and that didnt happen AT ALL. I ended up with their signing bonus but i did happen to get ZERO COST. i dont know how that happened but its the only lease that i got that on. Recently, the invoices came with a bunch of line items involving “costs” and I had to email them and REMIND them to look at my lease agreement and to please have this oversight corrected.

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I would keep pushing for 20%. The group you are talking to is most likely flipping your lease and wanting to keep an override.

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Thanks for the response! I’m just looking for wording as she seemed to be confused as to my asking for “no cost royalty” her response just says, if I want “other language” to let her know. I thought that’s what I was asking for when I said I wanted no cost royalty. Is it actually stated differently? This was suggested from another subscriber here.

The lessee is unlikely to give you effective ‘no cost’ lease language as it not to their advantage. It is up to you to propose any changes to the lease form or to present your own form. Leases are complex and interpretation of clauses are affected by state law and cases.

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Hi, yes…I was asked if I had other language I wanted to submit re the royalties. Please, I need to understand how I do that? What do I say I want my contract to be drawn up as? I already asked for “no cost royalties” and that didn’t seem to matter. Thank you for responding, I really only know what people on here help me with!!!

I only accept 25% royalty. Why is the bonus so low? I have gone unleased in many cases when the bonus is low. I end up with 100% royalties less production costs.

Brenda, Lease rates and bonus vary widely across US, and even within a county due to geology and potential production. Presumably the poster owns very little acreage. Different states have different laws for payout for nonparticipating minerals. Texas is 100% of costs on a well by well basis. New Mexico sets a penalty of 200% to 300%, and I think it may include all wells under a pooling order.