Do you have a lease and have you looked at any deals to sell a percentage of your rights? I'm looking for advice, warnings, what to watch for, etc.!

Thanks! Christiane

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not sure what they were referring to as "surface rights". maybe shallow minerals? gravel, shale, bluestone?

if i were thinking of selling my o&g rights, i wouldnt lump in the minerals as well.

i'm almost sure that you could do some sort of nsd deal, but you'd better have a lawyer cover all of your bases for you on that ballfield.

i would also imagine that an nsd deal would lower the value of the minerals, and of course there would be the lawyers fees.

wj

wj,  To clarify a little, they only wanted the gas and oil rights.  As far as surface, I understood that to mean no surface access or use of the surface area.  But in hind sight, I guess the buyer just wouldn;t get paid for a pad ...I would...but maybe I would not have a say so where they could put the pad.

apologies brat, i took, " gas/oil minerals" to mean all 3.

any surface disturbance compensation would go to the surface owner.

none of the offers that i've received mentioned surface disturbance prohibitions. and they certainly couldnt all be, so it sounds like you have some protection there.

i'd still run it past a lawyer to make sure it passes the sniff test though.

wj

One of the bundle of rights with real estate (including minerals) is the right of ingress and egress.  Simply sell or lease your mineral AND retain the RIGHT OF INGRESS AND EGRESS. In other words, they cannot explore, enter nor drill on you without a separate agreement.  So I keep the surface and sell the mineral sans egress and they approach me. I say, for a fee, I will allow seismic or magnetic surveys to cross me. But I will not allow egress and ingress otherwise.  That means no pipeline, no roads, no well pads.  With drilling being lumped into 3 or 4 wells on the same pad, keep in mind that a single pad could be 3 or more acres in size.

As far as oil companies "ripping us off" - no actionable fraud, it is just that they are at a decided advantage in negotiation if you don't know how to read a lease or find someone that does. The post-production expenses are eating people up on declining wells... Fixed expenses are running the property expenses below the economic limit but companies are hanging on to it to keep the lease alive.

There are plenty of scams out there. A professor Wright wrote a book in 1865 (yep 1865) describing the various ways promoters operated in NW Pennsylvania.  They sold rapidly declining wells after leasing a single acre and dumping the salt water in the creek... The more things change the more they stay the same.

 Reply by LERRET

"Simply sell or lease your mineral AND retain the RIGHT OF INGRESS AND EGRESS. In other words, they cannot explore, enter nor drill on you without a separate agreement."

i think i understand what you're attempting to say there, but simply retaining ones right to ingress and egress, does not deny it to another.

their right to i&e must be restricted or excluded by written agreement otherwise it would be implied to exist.

thus the need for the lawyer. if you take advice off of an internet forum, you do so at your own risk. if a lawyer gives you the green light, he is liable for his professional opinion. and get the lawyers opinion in writing too.

wj

To WJ and LERRET:  I'm a landowner. Not selling but I've had some unique things happen with my property so here's a less complex idea than ingress/egress. 

If you own 100 acres and sell, keep 2 acres.  That makes you a partner in any future lease and thus you can hold up the entire 100 acres until you get the terms you want for it such as surface provisions etc.  Your keeping 2 acres is not for the cash as much as it is the control of the other 98 acres ( minerals ) you sold.

 Or if it's a partial sale say 50:50, subdivide it if you can and sell the mineral interest that is not next to your house, barn etc.  I haven't had to do any of this but I have had to use my setbacks in my lease and they do work.   So selling can be done in a similar manner.  Build setbacks in by not selling next to your valuable homes/tennis courts etc.

Hope that helps whatever you/anyone decides. 

 

Talk to an attorney?

We received a letter from a company in Louisiana wanting to purchase our mineral rights. We live in Harrison County WV. I threw it away!

I have received several letters but mainly one company comes back for repeat offers.  Now they are offering less with the threat that they may not be able to leave this offer on the table for very long if at all, I say that is fine with me.  I threw my letters away too.  Good for you.  I live in Columbiana County, Oh.

Corrho,

It sounds like we got the same letter. The letter I got used CHK's statement in a recent investors call as leverage to get people to sell and to hurry up if interested. No money amount this time in that letter as before.

Hi Kathleen, my first letters had the amount of 96k for 22 acres and now it is down to 46k but it is from I believe BCI or some such company name.  It's hard to tell what we will get but I get tired of the offers and we would be selling out our family's futures if we do this.  We may not get anything from the utica but who knows maybe the kids can get a single drilling and some gas and oil free.  Before all this started we had a meeting with a company from Canfield.  They were going to put a vertical well on our land, it only paid 450 for sign on and free gas to my family on this acreage but that was better than nothing since we weren't aware of the situation of the utica at the time.  Columbia stopped the lease of course but it had let several of my neighbors sign on and they were paid.  These same neighbors today do not own their deep rights.  I do own my deep rights but of course Columbia wouldn't let anyone drill through Brinker UNTIL NOW when they can reap the benefits.  Everything is so frustrating here in the Brinker.  The ones of us that were allowed to sign and receive sign on bonus now have to sit and wait until litigation is finished and then there is no guarantee that we will be in a unit.  I haven't planned my life around receiving anything more but have been very thankful for what we have received.  Of course now  Hilcorp has our deep rights after purchasing from Chesapeake.  I said more than I meant too but hey that's what this site is for.

Mike,

You are wrong.. WV does require a section that states this was the actual amount transferred for the deed. It is what they make their basis on for depreciation so they are not going to gyp themselves out of depreciation.

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