I found out I have a 12.5% share of ~100 acres currently under development in Webster District. What kind of lease offer should I be looking for here in 2025? I assume I just negotiate for ~12.5 acres (representing my share in the lease agreement? I see people posting about demanding no pooling, no storage, etc. Anything else I should be concerned about? Thanks in advance as I’m new to this stuff!
Welcome to the forum. As a starting point to better educate yourself on these issues I suggest going to the Marshall County documents site 129.71.117.225 and select Book and Page on the dropdown and then type in 1228 in the Book box and 18 in the Page box. A recent lease example from Southwestern Production (now Expand Energy) comes up and you can peruse the language. Pay particular attention to the Exhibit B and Addendum language in the later pages. This language modifies the boilerplate language in the lease. Things like royalty percentage, storage rights, no cost, hold harmless etc. That said do you know what company is proposing the lease? You need to confirm the net acres you own which the landman can supply. If it is the 12.5 you mentioned you should not settle for less than $4,000 per acre bonus and try to get $4,500 per. The royalty should be 18%, nothing less. They will always lowball in early offers. If you don’t feel comfortable negotiating an O&G attorney can certainly help. You mentioned the property is being developed. Have you been contacted or received a lease proposal? The documents site is a good reference to see what others are negotiating. The memorandum of leases on the site don’t always show complete detail although most from Southwestern are somewhat thorough. You can check earlier Books and Pages for earlier references. Good luck.
Not sure why you wouldn’t allow for pooling. If you want your interest horizontally developed (which is the only way to realize the value here), you want to allow for pooling. I don’t think anyone would agree to this anyway. You may have heard someone mention a limitation on the amount of total acres allowed in the unit you are pooled in. This is because in some cases, if the unit you are in is too large in relation to the length of the wells, your interest can be diluted. In my opinion, I don’t think this is something worth negotiating over though. At some point you have to trust the process because ultimately the operator is going to develop the acreage the best possible way they can. It has to do with the area, the geology, dry gas vs liquids, etc. Dry gas areas typically require the need for wider spacing “bigger unit/well length”. Hope that helps.