A guy from Halo Land approached me and said that they was working for Ascent. He offered me $700 per acre, each year up to 10 years, and said that they wouldn't pay it up front. I guess they pay me every year the $700 per acre, and they can cancel any time? He called it a delay rentals.
Is Ascent the only ones out here offering a crazy delay payment. I wanted to see if anyone else was getting approached with the same nonsense? This seems like a bad deal because the price could go up and I am stuck with the $700 for 10 years!!
Thanks Soundcraft, for the wise advice.....
Hi Brett, what township are you in? I'm in Wills
Some people are saying"hey,where do I sign". unaware!
You should already have been speaking with your neighbors about this issue.
Find out what they have been offered, have any of them signed already.
Beyond the bonus money you should also be looking at the terms of the lease.
There is strength in numbers, if you and your neighbors work together you may be able to resolve your issues quicker and more to your advantage.
Be aware that the company will only offer so much.
Lots of good advice here already. I'd just like to add a couple things. First, 10 years is double the going rate down here in West Virginia, and I'm reasonably confident that 10 years is double the going rate in Ohio still. I don't work in Ohio so I can't say for sure.
Second, you can structure a delay rental to benefit you. The Paid-Up Lease that everyone likes can put you into a higher tax bracket. Talk with a CPA about how you can minimize your income tax liability. Talk to an attorney who does a lot of oil and gas work about how to draft the lease. You won't be sorry if you get someone who's good.
From reading all the comments it looks like the "Just Say No" technique has worked out for you.
Seriously consider getting together with your neighbors to negotiate. That's one thing I've been trying to get people in West Virginia to do. The old saying, "the more the merrier" is very true when negotiating with oil and gas companies.
I agree with all of your points, but will add another point of view. I agree, 10 years is too long of a term for a binding lease, however there are countless leases that are for 5 years with an automatic renewal for an additional 5 years. For some reason, people look at the latter differently than a 10 year lease, which equate to the same term in my eyes.
Fortunately, I have been successful in limiting all of my leases to 3 or 5 years, without a renewal clause. Most production companies throw temper tantrums, but accept the shorter lease term.
you are right. just touching the oil window and having great results. Just wait till oil goes back up to $70./$80. Then they will get interested and they are hoping to talk a bunch of unsuspecting landowners into some crappy leases in that window.
if you look around these big oil producing wells they have thousands of untouched acres that they are trying to portray as not so good look west of the big producers and you will see virtually no wells drilled
Salt Fork State Park's 21000 acres may be sitting on the motherload.
Legislation was passed recently to allow drilling under the Interstate hi ways maybe now the State Park acres are gonna be next and this is why the land close to and adjacent to state parks is so desirable.