Hello! Myself & my siblings were approached by an oil and gas company for a lease. I’m trying to find out what is a good way of negotiating. Historically, my dad, the previous owner, received $125,000 for 20 acres. The one put forth to us was for only $80,000 with an 18% royalty. The representative uses words like substantial for the initial payment, which to me is subjective considering past payment. He also keeps saying its the royalty that is where we will make out; however, if they do not drill, the percentage really doesn’t mean anything at this point and no commitment to actual drilling has been given. I told him we wanted to negotiate and he went up $1,000 an acre. How do you know if you are asking for too much that may kill the deal? I would be happy if he met or exceeded the $125,000 to $150,000. I need help with thoughts on this all; I’ve never done this before and I don’t want to make a mistake. Thank you~
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@kfallon * Everything should be in writing. Don’t accept verbal promises. It’s not all about the bonus money, you want higher royalty, gross at well head, Pugh and Depth Clause and more.
- Don’t rush. They may try to pressure you, but you have time unless there’s a specific legal deadline (which is rare).
- ask the Petroleum Landman for a proposed map
- Consult an Oil and Gas Attorney or Petroleum Mineral Advisor : Especially if you’re unsure about your rights or want to negotiate better terms and can help you navigate this.
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Hi! I’m also in Monroe county and I was approached last week about leasing with Gulfport Energy. My family had leases on this property before I inherited it so this is my first time negotiating and going through the leasing process as well. What township are you located in?