I have been contacted by a Landman concerning land with mineral rights in Pleasants Co, WV near St Marys. He is offering $500.00 per acre for the lease bonus. Is this the going rate in this area?
I'm an attorney and do a lot of oil and gas work. Mostly what I do is consult with mineral and surface owners about their leases and any other dealings they have with the oil and gas companies. I haven't seen a lease in Pleasants County yet, but I can extrapolate from what I've seen in other counties.
The first thing you need to know, if you don't already, is that you are in the wet gas zone. That means your minerals are worth more than those in, say, Barbour County. Barbour has exclusively dry gas, and I have seen offers starting at $500/acre get negotiated up to $1,250/acre.
So while $500 is the starting offer, you can get a lot better than that. In Ritchie County you can get $2,500/acre, and maybe more. In Tyler County you can get $3,000/acre, and one guy called me saying that he'd gotten JayBee and Antero into a bidding war and gotten them up to $4,500/acre. Don't forget about the royalties, either. The bonus is nice, but the royalties will be better.
One more thing to think about. If you have a tiny acreage amount, you're not going to have much in the way of negotiating leverage. With more, you have more. So if you know your neighbors own minerals, you should talk with them about banding together to negotiate for a better lease.
Also, if you can afford it at all (bold, blatant advertising follows) you really should hire an attorney who does oil and gas work regularly. But don't take my word from it. Spend some time on the forum and you'll see lots of people saying the same thing.
Keep reading and asking questions. Best of luck!
LOL. I k new that last paragraph was coming.
Kyle Nuttall said:
I'm an attorney and do a lot of oil and gas work. Mostly what I do is consult with mineral and surface owners about their leases and any other dealings they have with the oil and gas companies. I haven't seen a lease in Pleasants County yet, but I can extrapolate from what I've seen in other counties.
The first thing you need to know, if you don't already, is that you are in the wet gas zone. That means your minerals are worth more than those in, say, Barbour County. Barbour has exclusively dry gas, and I have seen offers starting at $500/acre get negotiated up to $1,250/acre.
So while $500 is the starting offer, you can get a lot better than that. In Ritchie County you can get $2,500/acre, and maybe more. In Tyler County you can get $3,000/acre, and one guy called me saying that he'd gotten JayBee and Antero into a bidding war and gotten them up to $4,500/acre. Don't forget about the royalties, either. The bonus is nice, but the royalties will be better.
One more thing to think about. If you have a tiny acreage amount, you're not going to have much in the way of negotiating leverage. With more, you have more. So if you know your neighbors own minerals, you should talk with them about banding together to negotiate for a better lease.
Also, if you can afford it at all (bold, blatant advertising follows) you really should hire an attorney who does oil and gas work regularly. But don't take my word from it. Spend some time on the forum and you'll see lots of people saying the same thing.
Keep reading and asking questions. Best of luck!
I'm becoming predictable. Sigh.
Thank you so much for you information and advice.