Has anyone here negotiated a lease within the last 6–12 months and ended up getting significantly better terms than the company’s first offer?
I’m less interested in exact dollar amounts publicly, but I’d love to hear what strategies worked.
I’d really appreciate learning from someone who’s been through it recently thanks in advance.
It may depend upon where you are located. Some areas have extensive competition and some do not. You can most always get better in the long run than the first offer just by asking for a higher royalty and better lease clauses
The most critical issue is not the bonus, but the lease clauses. Most of us would like the highest royalty that we can get. The one time bonus or even zero if the royalty is 1/4th is usually far outweighed by the many years of a higher royalty on a good lease. It is wise to get an attorney to look at a lease draft before signing as the draft lease is not in the mineral owner’s favor since it was written by the operator’s or lessee’s attorneys. If you have one acre, might not be worth the expense, but more than five might be.
Patience and research are the greatest contributors to enhanced value. Depending on where your property is in the OGL acquisition cycle can heavily determine the value of the offer. Early on the landman is focused on gaining as much acreage on the most favorable terms. As you approach drilling operations, offers tend to become more favorable to the mineral owner. Take the time to reach out to other companies that are leasing in your area since the competition can increase values.
If you are in an area where there is horizontal development, spend some time to learn the economics of this type of development. An example is when you are told the economics do not allow them to increase the bonus amount. Example:
$1000/ac * 1280 acres = $1,280,000 land cost
If you assume they plan to develop 4 to 6 horizontal wells on the property, then they are looking at $60M-$100M in development cost. This means that land cost tends to be a small part of the economics. Whereas the NRI is a much more significant economic component. This is why most professional mineral owners negotiate hard for the highest royalty in these situations.
If you are a person that seeks the higher bonus amount, then argue that the increase in the land cost is minimal and the company gains a large economic benefit from the better NRI.
I did. Double the bonus per acre that they offered and 5% higher royalty plus they offered net and I negotiated gross at wellhead.
If the phrase "at the wellhead is used, you are probably going to be liable for post-production costs. See Devon Energy Prod. Co., L.P. v. Oliver, No. 13-25-00131-CV, 2026 WL 545190 (Tex. App.—Corpus Christi–Edinburg Feb. 26, 2026, no pet.).
Sorry… My post regarding net and gross negotiations was backwards. They offered NET and I negotiated “GROSS”.
I would love to know how to negotiate my pending lease right now. I live in Colorado. They won’t budge on bonus and royalty, but I’m trying to get better terms for the lease. They still insist on a value enhancement exception that I won’t accept. I’m in Stephens county section 8 2N 5W. I’m holding out until I get the right language in the lease. I’m not an attorney, but I know when I’m being hoodwinked
Depending on the acreage, it may be worth contacting a local minerals attorney and they may negotiate on your behalf. Also you can post in the TX section for your county and see if anyone else has dealt with that company and see what the going lease rates are.
Sorry, Colorado section
Oklahoma is an “implied covenant to market” state which means that the operator is supposed to get your product to market without charging you-unless you agree to it in a lease. Which is why they do not want to budge on the what many call the enhancement language. There are also some other clauses in the draft lease which really need to be changed.
If you have more than a few acres, it is wise to get an experienced oil and gas attorney to help negotiate and get the better terms in the lease clauses. Most of us would want the highest royalty.
You also do not have to lease. Most sections eventually end up being force pooled in OK. Force pooling has its own advantages, so waiting for that is another option.
0_The Pooling Process in Oklahoma.pdf (340.4 KB)
I do not see any leases filed in that section right now, so there does not seem to be a rush. I see quite a few groups leasing in that township over the last 24 months, so you may get offers from other agents. Leasing with an agent that is not working for the operator frequently gets more flexible terms.
Hello Ms. Barnes, We are in the process of negotiating a new lease and have been for almost 9 months now. Differrent landmen coming and going over time but the same oil company that already has wells under a single layer lease. It certainly pays to take your time. So my question is:
We requested the cost free royalty and submitted language found on the internet. The oil company agreed but wanted their language ( common on their leases to individuals who requested it) which states: It is agreed between the parties herein that, notwithstanding any language to the contrary, all oil and gas or other proceeds accruing to theLessor under this lease, or by state law shall be without deduction, directly or indirectly, for the ost of all fees to the point of sale, in or on the leased premises or lands pooled therewith, including producing gathering, storing, separating, treating, dehydration, compressing, processing, manufacturing, transporting and marketing the oil and gas and other products produced hereunder.
It seems ok but I am checking every paragraph very, very carefully. Thank you so much for all the help you give to us here on the forum. PRICELESS We thought of a lawyer but have no idea how to select one.
What state are you in? The language needs to be checked by an attorney licensed in that state. You can find several of them listed in the Directories tab above. Also, you can check the state bar association under oil and gas specialty.
In Texas
Definitely get the language checked because you may have other wording in the lease that may affect whether that really is a no deductions clause that is clean. Especially if you have “at the wellhead” in the royalty clause.
Ok. There is language stating gross proceeds received by Lessee and then when sold to an Affiliate, of Lessee, gross proceeds computed at point of sale
To pay Leesor on all other minerals mined and marketed or utilized by Leesee from premises … of the gross proceeds received at the point of sale
There is simply no way that language found on the internet will be updated to the most recent Texas cases regarding costs and royalties as there are new decisions every year. As Martha has pointed out, the lease must be read in its entirety to determine the effectiveness of any ‘no cost’ language. Many companies today are simply contracting that the point of sale is at the wellhead, with pricing computed as the value the processing plant less all costs from the well to and through the plant (transportation, gathering, processing, etc.) Under Texas case law, that means that all post-production costs are deducted for royalty purposes.
You want that point of sale at the tailgate of the gas processing plant, not at the mouth of the well. Point of sale location is critical as to whether you pay post production charges or not.
Thanks for your advice
Thanks so much for your advice.
I want to jump into your issue for just a bit @Sandy_Hopper. The feedback you are getting from the pros on this forum is this issue is more complex then you might imagine. The addition of some or many of the parts of the proposed language to the document will most likely lead to poor results. You are dealing with professionals on the other side that have a great deal of technical support. They will propose minimal changes and wait for your response or require that you propose the changes first. You obviously have to consider economics before seeking professional support. Too many of the forum members try to come here for professional advice and confuse best practices for that support. Good luck to you.