Negotiating Lease Modifications

Here’s a question for the legal folks. I have some HBP leases with old lease agreements on shallow wells. An operator wants to drill a new Horizontal well and wants me to update the lease to include new language (pooling, depth, etc) in that lease.

Can I negotiate this to get a better royalty rate or a signing bonus? I know legally I can, but is it done and do operators actually modify the lease royalties and/or bonuses in these situations?

Thanks in advance!

Yes, you definitely can. We’ve gotten up to $500/acre on a lease modification before, and I’ve heard of others getting more. We’ve gotten an increase in the royalty, too, but that’s usually not as easy to get a lot of movement on.

You’ll want to ask for a lot of the same changes that you would with a lease: No Warranty of Title, No Recoupment, Indemnification, changes to the Shut-in royalty clause, maybe a formation limit, and a few other things that will be specific to whichever company you’re dealing with.

1 Like

I have negotiated 3 or 4 modifications for better terms in both Wetzel and Marion Counties. Personally I care little about the bonus/ac consideration and focus purely on items pertaining to production. Be careful. If your assets are HBP by an early lease, chances are you are 12.5% True Gross. Most will tell you a 12.5% Gross lease will treat you better than a 15% net lease, and IMO they are right. Carefully review your steering lease. If it is true gross and they are not willing to adjust the rate, ask for re-enforcement in the modification that your lease is TRUE GROSS. Use an attorney if you have any doubt as they will try to sneak “closet deduction” language in there at times.

Good Luck!

1 Like

We just received a letter in the mail from a company wanting to buy our mineral rights. Recommendations on determining if the amount is fair. I think it is a low offer. The permit site doesn’t show any wells on the property yet. How can I determine what the yeild may be on the property? Thanks for any help!

You can observe qualified professionals (often with localized expertise) who provide services to mineral owners right here on The Mineral Rights Forum. You will notice them among 3 different instances on the site:

  • in display image ads and/or brief text messaging on site

  • in our Mineral Service Provider Directory in the main navigation above. These are arranged by professional discipline.

  • as a Business Member participating in many conversations throughout the site (note the blue colored “B” on their picture and blue text on their posts).

These practitioners are often able to provide the specific (and often localized) services that meet your needs.


The Mineral Rights Forum Administration