Second Inquiry From Landman to Lease

West Virginia Mineral Rights Wetzel County, WV
1

I've lived in FL my whole life and know nothing of this topic. I am owner of various parcels in Wetzel Co, WV which were my Grandparents and then my Father's and he passed them on to me.

Only one is producing anything. It is not the one they are interested in.

Approx a year ago I was contacted by a 'landman' for 'EQT Production' who told me they want to lease one of my 100 acre parcels for 5 years (which I've never known to be leased or produce anything). He sent me a contract for X amt of money as a 'signing bonus' plus a percentage of royalties. The contract he sent didn't even have a $ per acre amount, just this 'signing bonus' amount.

I came to this forum and read and gathered some question for him but when I called, he said, "I'll call you right back." And I never heard from him again, until last week. He called me to say, "I sent you a contract back in <whatever month, a year ago> and never received it back." I (very politely) told him 'Well Mr X, I spoke with you and asked you to call me back, but you never did." He apologized up and down and said he guessed the company wasn't as interested then as they are now, because "It seems to be more pressing now." As he put it.

Anyway, I have been contacted by several companies to BUY the rights, but none of them would lease it. This is the first company who wants to lease. I have sentimental attachment to where leasing doesn't seem so 'final' as selling it away.

So, I have this new 5 year lease, for my 100 acres in the 04-Grant district ... I have either 1/2 or 1/3 interest, depending on which one the lease is referring.

This contract is different and more specific in offering $2500 an acre and 15% royalty, and then a few pages of legal jargon that I'm smart enough to know I need a professional to get thru this. (I don't even understand how they came to the signing bonus amount because no matter how I do the math, it doesn't add up).

I am very interested in leasing it but I don't want to make mistakes.... I have read the 'what to do and what not to do' sections.... I am quite sure I need an atty to make sure I'm not signing something full of loop holes.... I read a few times in this forum about people getting snagged in bad deal because of these company's ability to wrangle words for their benefit.

I am at a loss on where to start. How do I find a decent atty knowledgeable in WV mineral rights leasing contracts.

Thanks for being patient. I am still trying to navigate my way around this forum, much less around a leasing contract!! ;)

Penny

PS.... Happy Mother's Day to Moms out there. :)

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you need to get an attorney...able to practice in WVA, and not in ca-hoots with the bunch there. Ask for reference from American Bar association. I am in ohio, contacted a local attorney who was versed in oil and gas leases and i paid him $200 for the information i had already acquired off the internet. Do not pay for advice that is free...i learnt the hard way.

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Penny,

I also have oil royalties in Wetzel County, W.V. I went with the Goddard & Wagoner law firm in Clarksburg, W.V.

Eddie Wagoner was very informative and I felt, negotiated me a good contract. I am so thankful I went with an attorney! He will remove that worry from your shoulders!

Good Luck!

Jane

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Hello Ladies,

I thank you for your information and quick reply.... I will contact the ABA and Mr Wagoner's office and feel things out.

How does one really know, if an atty is in cahoots with the oil people??

Jane, how did you know Mr Wagoner was trustworthy, as an example.

How do I know how much is a reasonable fee or if it's been padded??

Just thinking out loud.

Thank you again for your input. :)

Have a great day.

5

Penny,

We all must learn to trust sometime! Start negotiating with the oil company yourself. When you are done, (by that I mean when they tell you they won't go any higher), THEN, give it to your attorney if you are still unhappy.

My attorney only asked to be paid for the part he worked for, that is; whatever part he personally negotiated for me. He will start where you left off. If you don't like his terms, just say, "No". I thought Mr. Wagoner was very fair with his t

By the way, I would think a West Virginia lawyer would be the best to hire cause they KNOW West Virginia law. A Texas oil lawyer I contacted first turned me down cause he said he didn't know West Virginia law.

Another plus for a West Virginia attorney is that if oil companies refuse to pay royalties the attorney is right there to get on the problem. And I would think he would want to get on the problem cause he has a vested interest!

Come on! Jump in! Get your feet wet! I know the misgivings you are having but you CAN do it!

Jane

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Thanks Jane. :)

Yes, for sure I would get a WV atty.

I have been reading and reading this forum and it is truly overwhelming.
Question, when you say start negotiating with the oil company, do you mean to bypass this Landman who sent me the lease? Or keep dealing with him? I just want to clarify as to what your opinion is.

I'm, once again, getting a list of Qs together and one of them is 'how did you come up w/this signing bonus amount because no matter how I to the arithmetic, it just doesn't add up.' LOL

Thanks for the encouragement!!

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You're welcome Penny,

It's the landman you will be negotiating with Penny. Right now, he is the oil company! He represents them!

Bear in mind also Penny, it's not just the money you have to negotiate for. My siblings, who did not hire an attorney, missed out on some important issues my attorney obtained for me. Such as; they the oil company) have to pay me for natural gas liquids but not my siblings as they (my siblings) didn't know enough about this to negotiate for them! Nor did I, so Thank God for my attorney!

I am unclear about your question of the bonus amount. What doesn't add up for you?

Penny, go to the West Virginia Royalty Owners Association website: http://www.wvroa.com/ That will tell you how to get started with your negotiating pretty much. The June 18, 2013 entry written by Erica is entitled: Leasing Clauses to Look for and TOP LEASING CLAUSES TO INCLUDE OR REMOVE! If it is still on the website you will learn A LOT!!

I went back and reread your first entry to this forum. Concerning your Mr X, don't let him bully you. It sounds like that may be what he is doing. Hang in there and stand up for your rights. My landman told me three times the oil company was "fixin' to pull the plug" on the whole deal if I didn't decide to sign right away. My attorney told me that was a tactic they use to get you to sign before you decide to hire an attorney!

After rereading your first entry, I would say "hire an attorney" now. Make a deal with him to take his fee from the bonus signing amount when you receive it and get it over and done with. You have way too much land at stake (big bucks) to not get the best deal possible. You will feel so much better when you do!

There is also a gentleman attorney named Kyle Nutthall who practices in West Virginia. He has dedicated a lot of his time and advice to these forums. I would have hired him but at the time couldn't reach him. I would certainly recommend him as well tho I don't know what his terms for hire are. You may find Mr. Wagoner's fee more agreeable to you.

I'm here if you need me.

Jane

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Hi Jane,

You're so kind!! I feel so inept posting here because this is like jumping into a conversation in Chinese for me.

What I mean by the numbers don't add up is, the two parcels of rights (I don't even know the correct terms to use) that I own that are 100 acres each (I have several but 2 of them are 100 acres) ..... One of them I am 1/2 owner.... The other one I am 1/3 owner..... He gave me a price of 2500 an acre plus 15%.... I 'thought' the signing bonus was the 2500 an acre Xs the amount of acres I have rights to.... But when I times it by 1/3 or by 1/2 it just doesn't add up or even come close.

I DEFINITELY need an atty..... There is no way I can learn enough about this to negotiate anything.

I don't even know WHICH one the land man is referring to.... He knows all I have are the tax bills from Marion County.... That's the extent of my information on these things.... When I asked him to clarify which one this is for, he wrote me back: "" The subject tract would be Tax Map 20 parcel 18 in Grant District. """

OK then, but when I look at my tax bill, it just doesn't specify.

Dad always repeated that old saying about 'be smart enough to know when you don't know what the heck you're talking about.' So yes, my next step is going to be inquiring to Goddard and Wagoner and hope he will work with me and possibly take his fee from whatever I can get paid.

Before I contact him I'm also going to take Patty's suggestion and contact the ABA..... I assume they will tell me if there are complaints against an atty and as she wrote, recommend one.... But I like hearing from someone (you, Jane) who has actually dealt with someone personally.

Yes, I have read Mr Nutthall's posts and find him incredibly informative.... I googled and researched him as much as I could.... I know this is just an assumption, but he looks pricey. ;)

On another note, I was recently going thru a ton of old paperwork and found contracts sent to me by Appalachian and Chesapeke and a MasonDixon Energy, going back 6, 8 years when they were asking different amounts, so I guess I should keep all this.... IDk if the atty would want to see them, but I figured it can't hurt to have.

I need to just bite the bullet and get going.... Like I wrote, this was handed down to me from my Granddad to my Dad and to me.... I have no one to hand it down to so I may as well reap the benefits and enjoy it while I'm here.... What's the point of sitting on it when I could really use it to better my life.

I'm just so afraid of making a mistake and looking back (as most of us have in our lives) and thinking, "YOU IDIOT!!" lol Know what I mean?? :)

As far as the land man, he hasn't been too bad.... I made it pretty clear on his 2nd call to me not to push me.... That I am interested, but I am not in a hurry and I won't rush and make stupid mistakes.... He told me 'Well the oil company must think it's a more pressing issue now since they had me contact you again.' I just thanked him and told him I'd be in touch.

Anyway, I guess I should get on the stick here.

Thank you, Jane, truly. I appreciate your posts VERY much.

Penny

9

Penny,

You are more than welcome for any assistance I might be able to provide you. I know the exact feelings of inadequacy you are feeling regarding this business of negotiating mineral rights. Most everyone who has written to this forum has felt the same at some time or other, I'm sure. That's why it's here, to try and help us (and protect, I presume) to do what's right for each of us.

Absolutely, keep every correspondence you have sent or been sent regarding royalties! Start you a file folder so you can keep it all together. Make personal notes of every conversation you have with your landman, the oil company, (if you have any) and your lawyer. Date everything!

I emailed Mr. Wagoner and told him to give you my email address if you contacted him. Don't know if he will remember, if not, just remind him. Just tell him Jane, from Okla. I told him your name was Penny, from Florida. So, if you need to ask me more, you are welcome to email me. Didn't want to put my email add on this public forum.

Email me please and maybe I can help you get started. I figured up what you should be getting on 1/3 of your hundred acres and what you should be getting on your 1/2 ownership of 100 acres at the oil company's offer per acre. We'll see if we figured it out the same.

Sounds like you had a Dad like mine. Weren't we lucky?!!

Regards,

Jane

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Hi Jane :)

Yes, I really would like to email w/you..... He may be gone already for the long weekend so here's my email addr..... I don't care who sees it as it's not a primary one.

I see we can't message here unless we're 'friends??' How the heck do you become friends if you can't message each other?? Ha ha ;)

TTYS :)

Penny

[email protected]

11

Late to the party, as I get kind of busy at times, as pointed out by Jane Johnson. I'm sorry we couldn't get together earlier Jane Johnson, I would have enjoyed working with you.

$1500 is the lowest starting offer I've seen in Wetzel County recently, so they've started out high enough to know they're serious. 15% is also a good starting offer. I'd work them up quite a bit if I were you, on both. Don't settle for less than $3,500, and make sure to point out to them that properties over in Tyler are still going for $4,000/acre, and properties across the Ohio are going for quite a bit more. On the royalty, don't settle for less than 18%.

Unfortunately, with EQT you won't be able to get gross proceeds. I've tried and tried with them. I'm being told right now I may be able to get a cap on post-production costs, but not true gross proceeds. That's over in Taylor County, (not Tyler) which is in the dry gas area. The wet gas area, which includes Wetzel, is where post-production costs are an issue.

Other than that, the issues that are important to you are going to determine what else you negotiate.

Also, it sounds like your ownership is going to be a little different from what you think. That's the only reason I can come up with for why the bonus per acre times the ownership isn't adding up. Ask the landman, he should be willing to tell you what you own. Or if he's sent you paperwork, check the Agreement for Payment and the Offer Letter. One or the other should have your ownership amount somewhere.

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Hi Kyle,

Thanks so much for such an informative post. :)

I have looked at this contract several times and only see '100 acres more or less' as any amount.

I have more questions than I know what to do with and am noting them all down, for the land man, any future atty, etc.

Thankfully, I am not in any rush.

How do I even begin to know what is a fair amount asked for by an atty??

Anyway, I appreciate everyone's input and any further input and I wish EVERYONE a very safe and

HAPPY MEMORIAL DAY WEEKEND!!

13

The landman should be able to fill you in on the net acreage. It's odd that it's not listed in your paperwork somewhere, though. It won't be shown in the body of the lease. That number is for the tract size, and used only to identify the tract.

Well, you're asking an attorney to tell you how much to pay an attorney. I think I'm worth what I charge. I am definitely not the cheapest attorney out there. I will, however, actually help you figure out whether it makes financial sense to hire me. I'm sure I've lost some business that way, but the people I end up working with are happier, too. That's worth something.

Regardless of whether people here hire me, I'll keep posting and giving what advice I can. The more mineral owners know, the better leases we'll all be able to get.