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I have received a top lease offer.  Is there anything negative about a top lease?

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IF you have a lease for a horizontal well, I suspect there is verbiage in that lease that sets out what is required if you receive a Top Lease offer.  (First right of refusal, etc.)

IF you do NOT have a lease for a horizontal well, I suspect a Top Lease will monopolize the entire parcel.  I know of circumstances in which a Landman has presented a lease for a shallow well (Top Lease) at a ridiculously low royalty, which locks up the entire parcel and eliminates your ability to negotiate a fair market lease for a deep well.  I am not saying a Landman or production company would ever do anything unscrupulous, but contrary to what they claim, they do NOT have your best interest in mind.  <Gasp> 

What State / County is the parcel located, that can be a contributing factor.

I am not an Attorney and have told countless Attorney jokes, but hiring an Attorney that specializes in the OGM field, is cheap insurance - assurance.  $500.00 spent now can result in a $500,000.00 difference in royalty, over the lifetime of a well.


Do you think it is best to hire an  attorney where the mineral rights are or in the state where I live?

Speaking on my own behalf, if I approached a local attorney and mentioned OGM, he would laugh thinking "Oh My Gawd, he cannot spell OMG."  The attorneys I have hired, one firm is on retainer, are in West Virginia, they know the industry, the various people and have established relationships with landmen and production companies. 

Therefore, I strongly recommend you hire an attorney in the region of your minerals.

Also, try the Search feature in the upper right corner, as there have been several threads about the pros and cons of top leasing.


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