Would like to say hello to all, I am in need of assistance. We have been contacted by EQT to amend an old lease to include pooling and untization. They own the lease on the minerals that was signed around 60 years ago on approximately 50 acres that I have half interest in, my brother owning the other half. We both believe their offer is low. They are offering $400.00 per acre bonus at 12.5% royalty. We have tried to get them to negotiate something better, but they (contract Landman) say that EQT doesn't negotiate leases that they all ready hold production for. Has anyone ever heard of such a thing? It is my understanding that the Gas industry in Harrison county is quite large. We live out of state . Thank you for any and all help.
I have heard that about EQT.
Things to think about:
Something to be aware of: there is currently a forced pooling bill in the WV legislature (seems like there is always one) and eventually it will pass. Then they could force you. I wonder how many companies, like EQT, don't negotiate much hoping to get the bill passed.
Does your original lease say anything about free of cost royalty? Is it a flat rate lease (a certain amount per year no matter how much is produced)?
The horizontal wells pay quite a lot more per acre than the vertical wells.
Is there anything else in the modification proposal other than the pooling? Does the pool have a size (640 acres or 1280 acres seem to be standard).
Any wording about a storage well? I recently saw a modification from a different company that mentions brine storage well payments implying that if your acreage is pooled with a tract where there is a brine storage well that has regular payments, this storage well can hold the lease.
And, you can always say no thanks if you don't like the terms. Best to get an attorney, a WV oil and gas attorney, to look over any legal paper to be signed.
Thank you for the response. The original lease is a flat rate lease. So a 12.5% royalty On a horizontal well would definetly be an upgrade. They are wanting to pool 1280 acres, which we have no issue with. There is no mention of any storage. Our thoughts are that if our 50+ acres are all in play, asking for a 15% royalty doesn’t seem unreasonable. Your knowledge is appreciated. What are your thoughts on asking for 15%? We find it hard to believe they can just stop short of our acreage or “go around” 50+ acres. Just to avoid paying 2.5 % more than their offer. … Thank you again for your time.
You can ask. They probably will say no. They might wait and see if the Forced Pooling legislation passes. The most important thing is to ask for language stating that no deductions for post production costs will be taken out. A different company is interpreting the WV law on new wells drilled on old flat rate leases to mean that the lessor ( you) are paid the same rate as the lessee ( the company) which means you are charged your 1/8 of transport fees etc just like they are. See what they say about that.