net vs gross

Can someone tell me if 4,800/acre and 18.5% GROSS is better than 5,200 and 20% NET on 20 acres?  thanks....my head is swimming with too much legalese! 

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Permalink Reply by JK on July 3, 2013 at 4:35am

$5200 and 20% GROSS!

Never NET...

Permalink Reply by kris charles on July 3, 2013 at 6:53am

thanks...2 different offers, just trying to decide between the 2.  Seems so far "gross" is unanimous.

Permalink Reply by Kathleen on July 3, 2013 at 7:49am
Gross.
What they can justify for deductions when you have a net lease can impact your royalties 25%+.
Please have an attorney look over the gross lease. The oil and gas co., can add other wording that cancels the gross. Market enhancement is two such words.
Make sure is has the words no deductions for any reason! Another good one to have added is: the gas/oil co., is responsible to pay for any taxes, any government agency can come up with, as long as the lease is in effect.
Your attorney should know how to word that better.
Goggle ALOV, since they have a few leases on their website that you can look at and compare to your lease. The leases they have posted should help you see how a decent lease is worded.

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