Completely new to this and I have so many questions, I didn’t know I was the heir to an old mineral rights lease from the 1800s which wasn’t producing. I was sent a lease amendment because they want permission to drill new horizontal wells. I called the oil company for more information, the original lease is at 12.5% which they tried to tell me is the going rate and everyone signs for that amount, which I know is the state minimum, not a good royalty rate. The lease bonus on this amendment they sent is $1. They argued with me that this was typical, until I said don’t worry about it, I will have a lawyer look at it, then they completely changed their tune and said just tell us what you want and we will see what we can do. The problem is I don’t have money to actually pay a lawyer, and I have no idea what to ask for.
It is 140 acres and there are 225 owners. Can anyone tell me what to ask for in the lease? What is a typical signing bonus and royalty rate for Wetzel County? And how does the signing bonus work? If I negotiate new terms is that just for my lease, or all 225 owners? Is the signing bonus per acre and then divided out among the 225 owners or is it a one time bonus one the whole lease negotiated by each owner? And one other thing, it says online to ask for a time limit on the lease but she told me you can’t put a time limit on an amendment, only a new lease. Does anyone know if this is true? I can’t find the answer to this online anywhere. And does anyone know how much a lawyer typically costs to negotiate a lease? It says online you should have a lawyer in the area of your rights lease and I am in a different state and really don’t have money to pay a lawyer for this, but I don’t want to get ripped off either.
A cheaper alternative would be to hire a landman to help you negotiate the lease. Some might do it for a % of the bonus. You would want one who practices in WV and is not conflicted.
For the bonus and terms, you are negotiating your bonus/terms only and it is usually paid per net acre that you own. What you can negotiate (term limit, etc) depends on the original lease terms and if/how it is still in effect. There are a lot of ‘it depends’ factors to your question.
Welcome to the forum.
Ask the agent how many net acres you own. It is likely to be very small. You are only negotiating for your portion, not everyone else. Get an exact description from the agent.
A clarification of terms-You may have inherited mineral rights or a lease on those rights. If there is no production, then the lease has expired and you don’t want to sign an amendment to something that has expired. You want a new lease. Ask for a copy of the original lease and the amendment if they push back. You do not want to sign anything that you have not read and understood. The original lease language is important (if it is still valid). I have a feeling the agent is not telling everything to you.
Anytime an agent says “don’t worry about it” is red flag for me. Their response to the lawyer is quite telling. I always ask what is the highest royalty that has been offered in the three mile radius around the proposed new well. I ask for a minimum of 3/16ths just to see what they say. Most of the recent leases in Wetzel have been at 15%.
The signing bonus is for a paid up lease and is paid per acre. So if you have two acres, then a bonus of $10, then you get $20 up front. If the bonus is $1, then you get $2.
Royalties come after a well is drilled. Each owner negotiates their own bonus. Typical leases have a three-five year limit. I prefer three or less. The amendment should have a time frame on it.
If you want to share your township, I can check for new well activity nearby.
The Lease Amendment is a “Modification” to an existing older HBP (Held By Production) lease probably in the early 1900’s. It will state the older lease, date, Deed Book, and Page on the Amendment. The newer deep well operator which is probably Antero Resources needs to modify that older lease for the new pooling/unit and Shut-in clauses found in newer leases today to pool your interest into a proposed unit. Depending on your net interest, it’s hard to negotiate it. Just remember, if the operator can modify, you can too. There are laws of Co-Tenency and Force Pooling in the state of West Virginia. There is a company out of West Virginia called Mountain View, LLC that may be able to help you with this.