One of the Operators wants me to sign a lease with a Right of First Refusal in it, which basically means any time I get an offer they have to be notified and have the right to match.
Anybody have these types of leases? Not sure if I want this as it seems like it will handcuff me in the future if I ever want to sell.
Would love to hear people’s thoughts
I wouldn’t sign a contract with right of first refusal. Go on the internet and type in wvsoro and you can see a bunch of good advice when signing a contract. It’s more than likely a landman representing the oil and gas company and they are working in the gas company and their interest only. You have something they want let them pay for it. But definitely check out wv soro.
A ROFR on leasing isn’t necessarily going to handcuff you.
A ROFR on purchasing if you decide to sell later on can be a real problem/headache.
At a minimum, have the ROFR to purchase struck. Never sign anything with a purchase ROFR. Ask for hold harmless & true gross royalty language.
Good Luck!
Done some more research, and it seems that it really lowers the value later on if you ever try to sell, which is not what I want. Does seem like a purchase ROFR is in my best interest AT ALL!
Thanks for the advice everyone
I would never sign a lease with that in it, Please contact an oil and gas attorney.
My experience with my clients is that the ROFR on a sale is a real pain in the butt. They’ll usually redline it if you ask. You might have to ask twice. I strongly recommend people keep their mineral rights, but if you do decide to sell it’s worth it to get the ROFR removed.
Kyle - interesting you would always advise against selling your minerals in every circumstance. That is like saying, you should never sell your stocks, houses, bonds, gold, or any other asset you have no matter what. If the cash gives you peace of mind to do other things, not sure why you would advise against that in every case.
I would 100% advise AGAINST the ROFR language in every circumstance. Surprised there isnt a law against this practice as it gives the seller 0 negotiating leverage and steers aways potential buyer competition.
I advise everyone to keep their mineral rights, but when it’s in their best interest, I help them sell. I help people think through their situation and make the best decision for themselves. Usually that’s to keep, but not always.
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