SWN reached out to us to let us know we were partial heirs to Grandpa’s 1962 lease. A standard 12% oil and gas lease for the times. They want to renegotiate in order to pool the properties. They say the maximum royalty they will pay is 13.5% because of a prior agreement THEY made with Chesapeake. I am requesting 20% no deductions and $5000 per acre signing bonus. Am I correct when I state that when they want to renegotiate a portion of the lease, all parts can be negotiated. And have you ever heard of a company trying to keep royalties down because of their prior obligations? Thank you. I am fairly new to this.
You might be able to get those terms on a brand new lease, but the most you’ll get on a modification is generally a point or two on your royalty & 250-1000/acre.
All parts can be negotiated, but they will only bend so far. A lot of mods are signed with no money & no uplift in royalty, you won’t get deep production royalties however until you sign the mod.
Thank you Ice_Waters. I will keep that in mind
Ice_Waters, You were mostly correct. I got them from 12% to 13.5% with a $4000 signing bonus and no post production deductions priced at the well head. Thank you for the advice\opinion DH