New to all this, need some advise

[boost2525]

I was approached by a landman for a non-drilling lease (we’re in Ohio). I guess he has every property except mine because the previous owner was a hold out. Those leases go for a few more years and he wants to get my rights locked up before he loses the other leases. It’s a 10 acre pool and all of my acreage is included, in fact - I caught a quick glimpse of his map and we’re pretty much the center of his circle.

I talked to neighbors a half mile down the road who have a well/lease with this landman and they didn’t have anything negative to say.

I searched well production with ODNR and the six wells surrounding us produce (annually):

• MIN: 189 BRL oil, 822 MCF gas
• AVG: 980 BRL oil, 4,388 MCF gas
• MAX: 2,428 BRL oil, 9,073 MCF gas

The contract looks like a pretty fair starting point from everything I’ve read on this forum:

• No surface rights, no surface access without prior consent
• No pipeline planned, but right to negotiate that if needed
• $2k spud bonus
• Royalties comes from the gross, 1/8 to the pool then divided by percentage of property owned… so my cut would be 2.8%
• It does have the standard “I will warrant and defend the chain of title to my minerals” clause which I’m going to see if I can get removed

My questions are:

• Any red flags I should be looking for in the contract? (Yes I will get a lawyer for final review)
• I know every situation is different but how much room do these guys have in negotiating? It feels fair but I hate to leave anything on the table if it’s available. Can I get myself to 4% or is that absurd?

[AimeeHess]

It’s just not possible to competently assist you negotiate a lease piecemeal. Get a good oil and gas attorney who can look at the lease as a whole and also investigate the going rate for bonus and royalty to make sure you are getting the best deal. You are going to be better off if you stop talking to the land man immediately and letting an experienced oil and gas attorney negotiate for you. What you pay an attorney will pay off, probably immediately, but almost always in the long run. What’s in the often innocuous sounding fine print can cost you big time over the life of a lease. Also, if you try negotiating first and then turn it over to an attorney, you are going to substantially impair the attorney’s ability to negotiate for you.