Replies to This Discussion

Permalink Reply by Charles M Hall on July 26, 2013 at 7:38am

I have heard of such. In Monroe county I know a group of landowners in Malaga township that is refusing to sign an amendment without receiving compensation. I believe they were offered $1,000 per acre and turned it down. In the case I mentioned this group had old wells and the landowner did not get any upfront bonus for leasing the ground for horizontal drilling.

I don't know about the royalties though. I guess it just depends on how long you are willing to hold out and how much ground you have. Good luck.

• ▶ Reply

Permalink Reply by JREwing on July 26, 2013 at 8:10am

It's fortunate your property would seem to be in WV.  Pa just passed a bill that allows O&G companies to pool or unitize when the 'old' lease does not specifically address the issue.  But to your question, you can try and negotiate anything you want, bonus, royalty, land owner protections, etc., but be advised that the horizontal driller has already likely paid the "bonus money" the original shallow well leaseholder for the deep rights and they are typically loathe to pay more to the landowner.  You need to determine the level of risk you're willing to assume to attempt to secure new/better lease terms and then pick your battles with what you consider important; royalty?, bonus?, land owner friendly terms? and juxtapose those with the possibility of being left out of a producion unit(s).  It's tricky business, but only you can answer those questions.

• ▶ Reply

Permalink Reply by Nancy Mosley on July 26, 2013 at 9:25am

It depends on how badly the producer needs your tract. They might offer a $ amount per acre, and/or an overriding royalty in addition to your original royalty % (probably 12.5% ). The ORR comes out of the working interest part.

• ▶ Reply

Permalink Reply by The Hiker on July 28, 2013 at 6:45am

Noble Count Ohio $3000/acre to "amend" old Beck leases.  You may look at this as "hush money", because a clause within the addendum prevents the signing landowner from using a recent landowners vs Beck lawsuit in the future as a basis for a new lawsuit.  The initial offer was $1000, but quickly went to $3000.   No increase in royalties.

Form a group and go for that royalty that's on the table.

• ▶ Reply

Permalink Reply by Nancy Mosley on July 28, 2013 at 7:51am

The increase in royalty (probably as an overriding royalty) is more likely if the company wanting to pool and drill is the same as the company holding your original lease. There are arrangements between companies that share the working interest between them, or rather the company wanting to drill the new well, probably a horizontal, gets a part of the working interest and the original company gets a part of the new well. Any extra royalty to the mineral owner comes out of the new company's pocket so they are reluctant to cut into that too much. If they really need your acreage, they are more likely to give there. They probably have a very different pot of money for bonuses.
Just surmising on my part based on what little I know about something we are involved in. Always interedting to try to get a copy of any lease assignment from original company to new one. If any.

• ▶ Reply

Permalink Reply by Jim White on July 28, 2013 at 12:18pm

Thanks! We've found that some companies offer a small bonus while some companies offer better terms in the lease with no bonus or royalty bump. There must be thousands of these situation out there with the flat rate leases or just old leases and no pooling terms. I was hoping to get some input from those who have signed these amendments or had just received them and refused to sign. We refused to sign one amendment from a company who didn't just have the lease, but actually owned the other mineral interests. We have been sued by that company for partition.

• ▶ Reply