Why not negotiate 20% oil, standard rate gas?

Has anyone considered negotiating beyond the typical 15% with deductions clause and go for a higher percentage for oil in western PA?  After all, gas is good but oil is better, especially those along the wet/dry line.  After reading some of today's discussions about a 10/10 and and 5/5 being the standard along with all the typical lease language, from my perspective there is not much room for negotiations in the dry gas region, at least not leading to substantial monetary differences so, asking for higher oil royalty just may make sense as it's not really a loss to the gasco's since if they hit oil, it's an unexpected bonus anyway. 

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Permalink Reply by Billy Park Whyde on March 24, 2013 at 3:52pm

Amazing: You can ask for a lot of things. But can anyone actually say the price at the pump is negotiable? Isn't that price take it or leave it? If the price was demanded by the land owner sooner or latter they could establish a price to be met. It is called supply and demand.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on March 24, 2013 at 4:36pm

Bill, The price at the pump is set by  you and me when we go on Scottrade and invest in oil and gas futures. Each time you invest, you drive up the price of oil and gasoline. When the millionaires invest we all suffer. Look at coffee prices, yep, commodity.

I was thinking that maybe taking these items important to national security out of the commodities market along with some price controls similar to what has been done with milk would keep the oil, gasoline, and natural gas at a fair price so the O&G companies could be producing from the Marcellus in PA right now, instead of importing foreign oil.

 

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on March 24, 2013 at 4:08pm

NFF,  As I heard over and over again in the meetings for oil and gas leasing, "Everything Is Negotiable". 

 

 

Permalink Reply by New Field Farm on March 25, 2013 at 1:36am

I agree, everything is negotiable and both parties need to have the ability to give and take.  I really don't want to loose trees but may have to give in that respect.  The point is with some items, I don't think there is much room for negotiating but we can all think out of the box to some respect.  I do know that bonus rates are pretty solid, non flexible but other means for landowner revenue exist.  If however, the landowner capitulates easily, I would expect a downward trend.  I mean come on, most are already at or very close the the state minimum in royalty payments.  That tells me something.

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