I have property in Richie County and have been contacted by a company call Energy Services and Consulting. LLC My property is in Union and they are offering $1500.00 per mineral acre. Has anyone done business with this company? Is this a fair price for the minerals. They will do the research to obtain legal ownership of same. If anyone could help me I would appreciate it.
No on the price and they may be wanting your property and then flip it. Are they buying or leasing. Companies were paying 3000 and 18% to lease there. Bonus may be down some now due to prices. Post more on here and learn as you go.
Second what DT said. $1500/acre is cheap for a lease, and extreme low-balling for a sale. I haven't heard of Energy Services and Consulting, and I'm an attorney that does almost exclusively oil and gas work. That doesn't mean they're bad -- they may just be new -- but it does mean you should be cautious and do your research before entering into any agreement with them.
Bill, where is your mineral tract located? There are some areas in that district they are seeking and drilling on. Nancy will be on here soon and she can offer some real good info also. She is the resident records researcher.
Thanks DT! If you go up above this to the Discussion Forum for Ritchie County you will see something I added about the new online records system for Ritchie. Free to search and view, pay to download and print. You can search by name or document number (book and page). The older records are accessible as well, just more complicated.
I just looked under that name, and they only have deeds for mineral purchases recorded there. Unless you want to sell your mineral really cheap, I would think this is a company to ignore.
I'll come back a little later and give you a link to see if you can find your acreage, and see what activity is there. Parts of Union are busy now, the north east parts.
Mr. Bee, here is a link to the well interactive map. If you go there and put in 08509992 into the Attribute box, it will take you to one of the furthest south and west of the wells I can find in Union district, of the new horizontal wells. This particular one was permitted by Antero and marked as never drilled. They might go back and drill it later. They and EQT are the two companies who do the vast majority of drilling in Ritchie county now, of the horizontal wells, and almost nobody is drilling vertical wells. Noble is drilling in the north near and in Tyler county.
If you go to the main site for the WV office of oil and gas, look to the left hand list for General Information then Weekly Reports you can see new permits issued (with plat maps), and completion reports (when the well is drilled and completed, almost always at the start of production and sales) and other things. Worth a look at, usually new reports updated by Monday afternoon most weeks.
Please ask if you have more questions. We have a variety of members here, some of whom live in the area and others who don't but keep up with things various ways.
Thanks to all I appreciate your comments and will follow up on them. But I now have more questions, is it better to sell or lease the mineral rights. This company has now sent me a letter with a Non*binding letter of agreement they want me to sign saying this is only a formality.(comments) They then will issue a purchase agreement within 7 days. do I need legal representation during these negotiation? The property I own is 88 ac on county road 24/6. I talked on the phone with their independent consultant and I believe these are people that have been layoff from Antero recently. Nancy I did do the research and the well permit is east of my property thanks. Once again thanks to everyone
Bill,
I would never sell the mineral rights. Only lease, unless you need the money now. They hope to find people that will sell the rights so they can make better profit. If they are laid off from Antero, chances are they know a lot about the minerals in the area
thank you I will follow your advice
thanks I believe I will
Pushy and a professional acting bunch aren't they? Once they get someone to listen to their spill, they will be right on it. We still get an average of 2 companies yearly wanting to buy our minerals even after we leased them. This contact from Energy Services, is not a negotiation but, an offer to buy your minerals. Negotiating is when you and the oil company haggle over terms and money to lease your minerals. Watch out for papers being sent that seem harmless. Wording in those papers can be misleading and you may sign something you will regret. If you are unsure on how to deal with someone trying to take advantage of your minerals, yes, you should get legal assistance. You say they are offering 1500 an acre to buy your minerals. Most companies in the area are paying at least 2000 an acre to lease minerals. You do the math.
Have received a request for modification of 1961 lease of 1/2 OGM 174 acres. I do not have a copy of the 1961 lease so don't know the royalty % information. Bonus offered is a little over $100 per acre with a 120 day wait period for payment after signing.
Is the amount offered in line with going rate?
Why is the wait period so long for payment?
We have two other companies from whom we receive small monthly production payments on this 174 acres. Where do they stand in this?
This site is a godsend...thank you all.
Hi Lacy Wilson, If you go down to something I posted on Saturday you will see how to find Ritchie records online. The 1961 lease should be there. Please ask if you need some more help finding it, not completely straightforward. The royalty is likely to be 1/8 or 12.5%. Bonus to modify is probably reasonable but always ask for more than you are offered. Wait period might have to do with title checking or cash flow. About the other companies, search them in the newer database, maybe from 2012 or later, and see if you find a lease assignment to the company wanting the modification. Not a bad idea to have an attorney’s advice before signing something. We can give suggestions if you want. Please ask some more if you want, we like to help!
Nancy's advice is spot on, as usual. The $100/acre is a good first offer. Ask for $500/acre. Also make sure to get some Indemnification language in there, and No Warranty of Title language in there. Also ask for a Pugh clause. You have a large amount of acreage, so it's possible that they'll give you things that other people with small amounts of acreage won't get. If they won't do a Pugh clause, ask for a lease just for the specific formation/s they're going after. See if you can bump the royalty amount up. They usually won't but when you have a large interest they're more willing to do things they usually wouldn't. That old lease probably doesn't allow for post-production costs, so you don't have to worry about getting gross proceeds language added to the modification. Keep asking questions and doing research. The more you know the better off you'll be.
Lacy
The 120 days is the time in which they can back out of the lease if their plans change/find title problems, etc.. We usually do a 90 day and most agree. We signed one with HG and they waited until day 89 and backed out. Luckily EQT picked it up the next week.
Thank you Jim White, Nancy Mosley and Kuyle Nuttall!
You've been a great help.
I found a checklist which was very helpful, also. It is
Hi all. I recently inherited some OGM in Ritchie County and we've already been working on a lease with Antero. Just wanted to mention some of the changes I've had made thus far in the lease and what they are offering. First off, $1850 per mineral acre for signing bonus and 16.5% royalties. I think I'll ask them for 18% since that seems more like the going rate. What do you guys think about the price per mineral acre for the bonus? We had a Pugh Clause added in for Utica depths saying that if they don't drill it in 7 years, the rights revert back to us. We've had the "Warrenties" clause struck. We've had a "hold harmless" clause added. We've had a clause added that pays us before most post-production costs. That's about it for now. Just thought I'd share to see what others think. The Internet is full of wonderful information but this is definitely baptism by fire!
Yes ask for 18% and ask for more bonus, maybe $3000. Those changes sound pretty good. Always a good idea to have an attorney give your legal document a look. Read here and you'll find one. Just wondering, Clay district? Union?
This mineral stuff would be more like testing your patience to the limit. Make sure you have plenty of Tylenol handy if your negotiations get drawn out. Make sure you get good wording on the indemnification clause to protect from accidents and such even being a third party. Make sure you get wording on the warrant of title not just lining it out. Lining it out does not show what you really want said so no lining out. Make them put everything you agree or don't agree in the amendments at the end of your lease. Tell them they get no use of free gas on your shares. Put a time limit on when they have to pay royalties. 4 to 6 monthes after well goes online or they pay 3 to 5 % penalty. (Their lease says no penalty). Check the area where your minerals are. If it is in a good area where they are drilling they may offer more. They will also pressure you more and threaten you more if they don't get a lease, if it's in a good area. They will likely offer you a mineral enhancement clause or gross proceeds at the well. Neither are great but gross is better than the enhancement in my opinion. Add, the bonus money will not be subject to repayment if the company makes a mistake and wants it back. That does happen.
Good advice, DT. You learned a lot in your process. Those are all important, including the Tylenol!