Can someone advise me what typical lease terms exist in Marion County West Virginia. I am in the oil and gas industry, and am trying to help a relative who has recently received an offer to lease from a company called Marion Natural Energy, LLC for acreage that appears to be in the north 1/2 of Lincoln District. The basic terms are $1,500 per acre, 15% royalty, for a 5 year lease with the option to extend up to another 5 years. The lease is also full of clauses that would never fly in Texas where I work. Can anyone advise me about the basic terms offered, the reputation of this company, and the current leasing / drilling environment in this area of Marion County? Any help would be greatly appreciated!
I can give you what information I have at the moment. I have property just north of your relatives in Paw Paw district. Northeast Natural Energy/Marion Natural Energy has a lot of activity going on in the area. From what I have been told they are good to deal with but always have a local (WV) lawyer and that has mineral lease experience review any contract prior to signing. They will know what typical paid up leases they are seeing and terms. So I have an unsigned contract from them and per acre is a little more per acre. Some of this depends on how much land you have and how bad they need it. In close proximity there is no other company’s leasing. The next biggest area is to the west in Mannington. EQT is doing business there. However they are are not competing in the districts. It hurts lease negotiations. I can tell you they have every intension to drill. In your district and mine. First lease proposal is always low. Negotiate ,if not let the lawyer do it.
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@DBG - Marion Natural Energy is the other LLC that Northeast Natural Energy, LLC uses to take leases. NNE is based out of Morgantown, West Virginia. They are a drilling operator and have been drilling since 2015. Offers usually range around $1500 net mineral acre up to $4000 nma for bonus, and royalty is around 15% net. Depending on your relative’s ownership per net acre amount, please look up the West Virginia Co-Tenancy law which is a force pooling as long as the operator has 75% of the heirs leased in that tract.