Tug Hill Operating (TH Exploration, LLC)

Hello, I am new to the forum, and work for an Oil & Gas Operating Company in Texas. My family has a mineral interest in Wetzel Co, Proctor District, 182 acres and recently received an offer from Tug Hill for an Oil & Gas Lease. $4000 per acre and 17% royalty. I was wondering if anyone could tell me if this is a good company or not, as I have not heard of this company? And also if this is close to the going rates in WV now or not. Thank you for any information.

Several months after our mother passed in 2016 they contacted us about a lease for her mineral rights which we knew little about. We signed the lease and didn’t hear back and in the meantime I found out they had 120 days to respond with payment or back out. After the 120 days we received a letter from Tug Hill saying we didn’t own those mineral rights. As it turned out we did own some of it just not as many acres as they thought. Other than the initial excitement of receiving a large upfront amount it turned out to be a inexpensive lesson in dealing with land agents. Here is a link for the IDX Wetzel County record search. http://www.wetzelcountywv.us/

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Yes, this lease has 120 days before payment, too. Which bothers me a little. In Texas you usually get payment as soon as you sign and deliver the documents.

Is that 182 gross or net? Have you leased it before? Who did you lease it to last time? Reason I am asking is because of what person said above. Want to make sure you own so something similar doesn’t happen to your family.

Tug Hill is a pretty established company. 120 days is a pretty standard timeframe for West Virginia. I would push for 18% gross royalty though.

I thought it was law not a timeframe, but nothing makes sense in a world where an administration tells the FDA and other agencies to let the industries they monitor tell those agencies whether or not they are limiting or abolishing a product that may be harmful to humans whether ingested or applied topically. I’m sure they will do the right thing like limiting 1,000,000,000 opioid pills to a state with less than 2,000,000 people.

I’m a little late to the party, but here’s my two cents.

$4000/acre is a good start, but Wetzel County acreage has been going around $6000/acre to upwards of $7000/acre. The royalty should be 18% gross proceeds. Get a No Warranty of Title clause, a Hold Harmless clause, make sure there are no promises about old wells and leases, try to get no automatic extension of the primary term, get notification of assignment (if they sell their interest in the lease to someone else), get a No Gas Storage Rights clause, get a No Injection Wells or Disposal Wells clause, get a No Coal Bed Methane clause. Those are the absolute basics for a West Virginia lease. If you have more than a couple acres you can ask for a lot more. Good luck!