Assignment Royalty

I have 8 acres in Harrison Co that have an existing gas lease so no bonus or increased royaly appear to be available.  However, the old lease has a clause that it cannot be assigned to a new leassee with my written approval.  The current leasse is American Energy and they have offered me $3k to waive this clause on my 8 acres.  Anyone have experince with this before and does this sound like a fair offer?

 

Thanks in advance,

Eagleman

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Replies to This Discussion

Permalink Reply by Philip Brutz on August 8, 2014 at 9:08pm

You may want to try and get an increase in your royalty % in addition to the $3K bonus.

Permalink Reply by w. k. chirpas on August 9, 2014 at 7:53am

In what township is your land? 

Permalink Reply by Greg Hamilton on August 9, 2014 at 8:13am
And demand a market enhancementment clause!
Permalink Reply by Philip Brutz on August 9, 2014 at 8:33am

or "No Market Enhancement Clause"

But I would be very surprised if they would agree to it.

Permalink Reply by Robert and Valorie Fulton on August 9, 2014 at 9:06am

Is your lease with American Energy or Kimble?? American Energy has just joined the fray. There is a group dealing with Kimble for violating our leases. Kimble has joined with American Energy. Most of us would be pleased with the $3000, but it would be per acre. And the royalty we would require is GROSS!!

Permalink Reply by Matt Willis on August 9, 2014 at 12:55pm

Nottingham Township and the lease is with American Energy. 

Permalink Reply by brat on August 9, 2014 at 3:03pm

Matt, my property has also been assigned to AEP, but I am in Monroe twn.   Did they offer you $3000 per acre? or just a flat $3000?  Thanks in advance.

Permalink Reply by Matt Willis on August 12, 2014 at 10:47am

Brat, just a flat $3k.  I spoke with a lawyer who said I should shoot for double that amount.  He said with only 8 acres I do not have much leverage, but that the assignment should be worth at least $700-$800 an acre.  He also did not think I would have much chance of having the 12.5% royalty changed or have it change to gross from net.

Permalink Reply by Finnbear on August 12, 2014 at 11:51am

Ask for $1k/acre. Ask for better royalty. Ask for no deductions (gross vs net).

Know exactly what they are offering, ask for a LOT more, and then settle somewhere in between. If they NEED your 8 acres, they will be somewhat flexible.

Permalink Reply by Matt Willis on August 12, 2014 at 1:01pm

Thanks for the advice Finnbear, will try it out

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