I have been offered $4000 per NMA and 16% royalty for the lease on a small parcel in Proctor District for a new horizontal fracking well, but they want the lease to cover both Marcellus and Utica shale formations. Is this common? I thought companies normally leased only one formation at a time? Would it be a mistake to lease both formations on the same lease?
Leases are usually from the bottom of the grass roots to the center of the earth, so all horizons unless you can get a depth clause in the lease. If you have not leased before, would highly recommend that you get a good oil and gas attorney to look over any draft lease. The drafts are almost always highly in the favor of the operator and need significant edits to be more mineral owner friendly.
4k per acre and 16% sounds like a good offer in this area. I would not recommend hiring an attorney unless you have a big enough interest to justify the cost. Most leases out in this area include both formations but can sometimes get the operator to agree on whatever formation they are targeting. If that is the case, they likely have no interest in the other formations and may never have any interest so they are fine to not include it.
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