This is my first offer to lease mineral rights to an O & Gas Company. For me this offer is mind boggling, so i realize i will not be able to sign without an attorney’s advice.
I was only offered $200 signing bonus for net acreage of .02118, of 24.136 gross acres. Which doesn’t pay enough for legal advice.
In my research i found the “Co-tenancy Modernization and Majority Protection Act. I intend to inform the Oil & Gas Company that i would like to choose the “production royalty option”, as provided as a choice in the above Act. Seems fair to me. The main concern i have, is this Act still relevant? I believe it was enacted in 2018.
I would like to ask what you think you should get here. You have an incredibly small net acreage, and honestly, you may never see more than $100 from the royalty production from these wells. The $200 is a pretty fair offer, and is generally a flat-rate offer for what the gas companies will offer for these fractured pieces of land in order to fill out their units.
@DBDG - If you do the math, the drilling operator is offering you nearly $10,000 per net mineral acre. $10,000 multiplied by 0.02118 net acres is quite a high price for West Virginia. If you choose the Co-Tenancy route, the operator will pay you an average of around $3000 per net acre. That would make your bonus check through Co-Tenancy approximately $64.00. I recommend calling the Petroleum Landman who presented this lease offer to see if you can negotiate a higher lease royalty percentage and get it paid gross at the wellhead. I would suggest keeping the $200 and requesting the lease be modified.