In the Summer of 2010 CWEI contacted us with interest in leasing our property in Reeves county. Not knowing any better we signed a five year lease and were paid a signing bonus of $150/ac. for 252 net mineral acres with 20% royalty. Not long after signing, curiosity prompted me to search the internet for information. I found the Mineral Rights Forum and it didn’t take long to realize my mistake. We had signed a “Producers 88” lease but that wasn’t the worst of it – we signed it without getting an oil/gas Attorney involved. Had we hired one, our lease would not have been so one-sided in favor of the operator.
Reeves County Mineral Rights Forum has been a blessing. Several oil and gas professionals come here of their own free will and offer their time and knowledge to help folks with their questions. Many more members with years of experience in their fields of interest also come here to lend a helping hand. I have learned a lot over the past few years just by reading their posts. Inspired by all of this, my goal was to get a better lease with terms and conditions more favorable to us. This could only happen if our current lease expired without any activity. So, for the last two years of our five year lease I’ve been busy trying to educate myself knowing full well that on any given day a Well could be drilled, possibly keeping our lease in force.
Watching the board, I could not help but notice the compliments oil/gas Attorney, Wade Caldwell had received. From what I recall reading, Wade had secured a lease for some of these mineral owners. All were grateful and a few were pleasantly surprised that Wade was able to get them an even larger signing bonus than they had anticipated. With our lease expiring in a few months, I made a phone call to two respected members in the Reeves county group to get more feedback on Mr. Caldwell. Both gentleman spoke very highly of Wade. One of them even told me, “Caldwell’s nickname is ‘Bulldog’ because he’s known to be a real scrapper.” I’m here to tell you, Mr. Caldwell lived up to his nickname.
With the lease expiring July 2015, CWEI called once in December with an offer of $300/ac. with a 2 year extension of the Producers 88 lease we had in place. I declined their offer and told them it was to early to talk. First Week of March, the Land Man made it known he wanted to negotiate. Now that I’m armed with “some” knowledge I put what I had learned to the test by negotiating basic terms with the Land Man. Several offers would come over the next few Weeks but I declined them all sticking to my original plan of wanting a new lease form with better terms and conditions. In mid-April I decided it was time to hire Wade Caldwell. He asked me to bring him up to speed on where we were at. I told him we were up to – a different lease form, 3 year primary, no extension, 25% royalty, $750/ac.....but was told $1,000/ac. might be possible. I was able to negotiate the basics because of what I had learned through the Mineral Rights Forum and its members. I can’t thank you all enough!
Fast-forward five months to September and Wade Caldwell secured us a great lease with a $1,500/ac. signing bonus. The bonus amount was better than I had expected due to low oil prices and limited development in our immediate area. Wade really is a scrapper like his nickname suggests. He fought to get the protections we wanted and more. He kept me informed on all negotiations no matter how small the details were. Any questions or concerns I had and Wade answered them in a timely manner and in language I understood. There were times I felt like he was negotiating the lease on “his” behalf, not mine. That’s how engaged he was. Wade Caldwell is an excellent choice should you need an oil/gas Attorney and I highly recommend him.
I posted this because I want my experience to benefit the less-informed mineral owner like myself. I want them to understand one thing first and foremost....If you are asked to sign an oil/gas lease, a pipeline R.O.W. agreement or anything else, put the pen down and educate yourself first. The real money is in your royalty percentage and protections in your lease, not the signing bonus. In 2010, CWEI pressured us to sign a lease before they took their offer off the table. Do NOT repeat my mistake by letting an operator or their agent intimidate you. They would like nothing more than for you to sign a lease without first doing your homework – just like I did. If an operator is interested in your acreage chances are, others are interested too so be patient and don’t make knee-jerk decisions like I did. Our mishap turned positive when our lease expired without any activity. Thanks to the Mineral Rights Forum I was prepared this time around. I went from knowing absolutely nothing about leasing to negotiating basic terms with a land man – something I would have thought impossible five years ago. Mineral Rights Forum and its members not only provided me with the basics to get started, they also led me to an excellent oil and gas Attorney in Wade Caldwell. Comprehending an oil/gas contract is intimidating to be sure but investing a little time and patience to your benefit can make a huge difference going forward – it certainly made a difference for me and it can for you as well. I think it was Buddy Cotten who once said something to the affect that; “Everything in an oil and gas lease is negotiable except your name and legal description.” I can’t emphasize enough how important and accurate that statement is and everyone new to leasing should remember it. I wish all of you the best of luck with your minerals going forward and again my sincere gratitude for the Mineral Rights Forum and Wade Caldwell.