They bumped it up to 17% today per email…forgot to mention. My Land person is Mark Mellor w/S&A Research/Statoil
Tell the agent you want 20%/3000. Since you are out of state they figure you do not know what is happening here. Antero is one they don’t want to compete with. Who knows, the agents company may flip it to Antero anyway. Nothing should suprise you with these people. We had a company raise their offer from 1700 to 3000 and from 15% to 18% when we started asking questions and were patient.
DT…I’m understanding things much better now and all of you have been a big part of that, and I am thankful. So…the original offer on the table was the “generic” 16%. TBH, I think they made a mistake on the bonus amount= $1,077.55…that seems awfully low, and not sure if that means for each tract or lump sum. I got the 20%, but 3000??? Is that bonus? Please explain. Remember… I do not own the land, just the mineral rights which totals 44 acres…maybe with my mom’s tracts…more.
Deby, When you ask questions and negotiate for better terms you are then considered a “holdout”. These companies do not want to negotiate much… They are looking for easy non caring owners who see this as quick cash. The company gets a lease signed and then move on to the next owner. Not hearing from them is common and patience is key. This leasing does not happen over night just like they will not drill tomorrow and pay you the day after the well is complete. The agents will change and you may hear from someone different next time. Reason being, the last agent did not get that lease signed so they pass you on to the next “best” agent. Don’t forget, this is just business and hurt feelings and threats are not uncommon. While negotiating for our family it has been 2 years, with 6 month time lapses, numerous threats of partition suits, 6 land agents, many lies and throw in a few office managers and a company attorney, Hmm, did I miss anything?? The lease language is key and something you will have to live with for a long time. How and when and where and what you are getting paid royalties on are key. These things are what’s holding our family from signing. Read a lot about that from the oil/gas attorney sites online. Some of those sites will break down a lease and tell you what’s good and what’s not. Ask the company you are dealing with for a lease and then break it down and compare. The company lease is full of “stuff”, if not changed, will leave you with an empty feeling and a near empty pocketbook. When your mother signed the lease back a few years ago, mineral leases were not the talk and language was not as important. Those leases were mostly shallow well leases and royalties were less and the signing bonus was small. Now people are benefitting much more financially and the landscape is changing dramatically in the next few years. You did not mention what percentage of the tract you own. If you own a lot you can get better terms and language and money. My thoughts would be, to get all the information you can find. Then when you have a lease and all of your changes and questions on paper then, get a real oil/gas attorney to help finalize your negotiations.
Hi Deby, DT is right. You (and he and I and many others) are considered a “holdout” if you don’t sign their contract. They can wait for you if they aren’t in a big hurry to get your particular tract drilled.
Here are some links someone shared before
Links for Oil and Gas Lease Terms and Negotiation
http://www.gdhm.com/images/pdf/jbm-ogleasechecklist.pdf
CHECKLIST FOR NEGOTIATING AN OIL AND GAS LEASE
http://recenter.tamu.edu/pdf/229.pdf
Hints on Negotiating An Oil and Gas Lease
Read those for some good ideas. Those are written with the Oklahoma and Texas situation in mind, but gives a lot of good ideas and information.
The National Association of Royalty Owners (NARO) has a good pamphlet “Look Before You Lease” which is not expensive.
Another attorney to try is Heidi Kossuth. Try a Google search. No idea if she is super busy. Kyle is very good but as you have found out very difficult to get in touch with.
Stay in touch!
Nancy, Just from reading the Doddridge Co. site, there are some who are feeling it now for signing leases without some good changes. The company is holding up royalty payments and using the lessor’s money without penalty. Someday, I hope that someone gets a law passed saying that’s a breech and illegal to put in a lease without penalty. The lessor, needs to put it in their lease to keep the company from not paying in a timely manner. Those who sign a lease without the proper changes and clauses are not using good judgment. You would not buy house without checking it out. The banks sure do before they give you the money. These oil companies act like they are the owners of the minerals and you are “squatters”.
Right on, everyone! Thank God for those who look out for the little guy. Thank you, thank you, thank you!
I negotiated another percent, so I am now happy. This inherited end of this was a blessing in disguise, and I feel good now with what I have accomplished thus far. My indemnity reads as follows: Lessee agrees that it will indemnify Lessor against and save Lessor harmless from all claims and demands asserted against Lessor based on or arising out of any activity of operation of Lessee on the above described land.
Most companies will agree to indemnity clause and no warrant of title without much asking. The ones you need to get changed are the ones where the company gets deep into your pocket pertaining to your minerals. Those would be royalties, production costs, free use of gas, sales to affiliates, where and when they pay royalties, paying royalty on byproducts There are topics on how the indemnity and the warrant of title should put on paper. Read them. It is nice to get the royalty percentage but if you do not limit the deductions they will take most of it back. Remember this if nothing else. The company wants you to pay them for the use of your property. Does that make sense. They expect you to pay for getting your minerals out of the ground and you pay for getting them to market. Oh yeah, and want you to pay for everything in between there too. The rock the grass seed and your gas to run their huge generators. You get 20% in your lease and end up with a few per cent. That would not make me happy… Done venting.
Thanks, Buddy…and it’s back to the “negotiating board” yet again to address the WOT…mercy!
HHhhmmm…So…my current lease expires 12/4. Keep in mind I was just approached shortly before my lease that was dated Nov.7th. I guess they were waiting for my mom’s will and so to go through probate before approaching, which makes sense. As I have stated, I have had to QUICKLY educate myself. I contacted Kyle Nutall (or whatever his last name is), in several ways, with NO RESPONSE. I know he is busy and probably backed up with enough clients to last a lifetime. I’m not bad-mouthing anyone either. I DID make an attempt to contact a local attorney who wanted outrageous money pr.hr., just to “look over” contract. Honestly, I feel like the contract being offered was good, but to those of you who have responded to my posts thus far, advised to negotiate, and look out for myself due to the “expectations” of what might be produced, to keep it short. I DID start to negotiate, and as stated, I was offered one more percent from what was offered in the original lease. I did not exactly accept it, but also (mostly in emails) asked for a lease that closely matched up to my mom’s in language, -PLUS- an addendum as well that falls under most of what I have been reading in this forum…specifically, “10 things not to, and 10 things to do when negotiating.” I felt for the most part my landman and the property company per StatoilUSA were doing well with communicating and working towards an agreement to meet and sign this weekend. NOW I HAVE HEARD NOTHING. They are not responding. I don’t know what to do. Were they out of town for the holiday, or playing a game to see if I panic? Did something happen to the land man? I told them I would sign if they agreed to 18%, and the language I asked for in my lease. I was NOT asking for a new lease, just making sure the language and points matched my mom’s who had a lawyer as her spokesperson/guardian. ARE THEY BOUND TO HONOR THE LEASE AND MEET THE DEADLINE? The last I heard from landman, he was having a meeting 11/2, and he said the company was looking at offering new leases…leases that would benefit the company, rather than the mineral owners.
Dear Deby and DT
You might want to read this blog post carefully:
http://www.mineralrightsforum.com/profiles/blogs/warranty-of-title-…
The simple striking of a warranty provision or saying that lessor does not warrant title does almost no good whatsoever.
Buddy Cotten
Buddy, I have the WOT it in my favorites from one of your posts. Thanks for coming to our forum and bringing your expertise.
Very true again DT. Negotiating is knowing, or learning, what you can live with and what you need to have. The companies’ legal staff does this full time. We need to do our best to get educated. There will always be something we learn about later that would have been good to have in the lease, but we can do our best. And write our legislators, whether we live in state or not. Easy enough to find who is the WV senators and representative for our minerals’ county. We pay county property tax on our minerals and state income tax on revenue earned from WV so we have a right to voice our opinions even if we can’t vote for them.
Way to go Deby. Keep reading and learning. You and your descendants will be dealing with the gascos for a long time.
You bet. This is NOT the end by any means. I hope I do not have to eat any words or actions. I’m staying connected to this forum, and whatever I can get my hands on. I think the same company is going to buy my mom’s lease, so I will be negotiating again…I’m sure.
The warrant of title is is struck out on my lease. Line drawn through it. And I do not mind your venting. You are teaching us what to be aware of based on your experience. Much appreciated. Not sure there is the perfect lease.
Thanks Deby! I hope everybody in the Tyler group subscribes.
www.wvsoro.org is a good organization. Some surface owners are taking a beating in some areas with all the 24/7 activity. The state is also being affected by the activity on their roads. If people think that the oil companies are community friendly, check on the lawsuits they are dealing with by surface owners and some mineral owners.
The Parkersburg News had an article about leasing and some things owners need to be watching for. There should have been an article in all the papers telling about leasing sooner. Maybe folks would have been more informed on this important real property issue instead of being blindsided by the oil companies. Being uninformed is common nowadays since less than half the country reads the paper or listens to the news.