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Try for a clause about royalty payments needing to start within 3 or 4 months after production, and a stiff interest on late payments.
No deductions.
Good luck with those but they are important.
I have a sneaky feeling that when all these leases start to expire,that the second go-around will not be landowner friendly. I realize that those 1st leases that were signed in the big landgrab 3/4 years ago have a re-signing bonus option to extend the lease at the same terms and with the same royalty #s,but you better be prepared to re-negotiate. Most landowners ,especially the ones who have learned a lot on this site, are thinking;Yes, now I can negotiate a better deal! I know what I have, I know what it's worth,I know they want it/sometimes need it. I can ask for a bigger signing bonus, or higher royalty %, or get the post production costs taken off,etc. You may be wrong! The O&G companies are thinking the exact opposite! They may say, yes, we want to re-sign you, but this time we cant pay that large of a bonus. we want to include post production costs, we want 1280 acre units no pugh clauses, we want to be able to sell the products to whomever and wherever we want to,at whatever price we see fit. Take it or leave it! I figure some leases they will just let expire. Maybe some time in the future another driller may pick those spots to drill. Right now,they have their plans drawn out,they know where they want to drill,what kind of profit they are going to make,and how much their costs per well will be. Also, they know what they intend to pay the landowners and I bet it's not much over 12 1/2 % royalties however they can get that done,either by cheating,or by using the lease wordings. We are smarter now about it all, but so are they! They know what they can get away with,so they wont be offering any more than that. IMHO
I leased with C H K, small acr. for 5850 an acr. 20%, they have the right to renew for three more years at the same terms. hope they let it expire.
mee too! harrison co.ohio nottingham twp.
Speaking of land values in Wetzel County WV, what is going on at this well:
CHK: James Messenger WTZ 3H U
Jason,
If you know that you are in a productive drilling area based on the performance of local wells then my advise to you is hold out until the O&G company is on your doorstep.
I don't think there will be rampant leasing like there was before. The patterns are increasing clear, some areas are much better than the O&Gs thought 5 years ago while some areas are much worst. If a legitimate G&O company is trying to lease you then It a pretty good bet that they are coming in soon.
For areas where production is not "off the charts" but still profitable then I think Bo's comments above will apply.
Phil
Phil, what is the source of your map?
Jason, IMHO this map represents your area well; it is similar to one Gastar published over a year ago with a kidney shaped area showing a huge gas area. This map provides more detail based on the recent wells drilled. People in Wetzel need to think positive as your area has been proven to be a good one and a number of landowners have gotten good royalty checks. The County Commission and the Board of Education has lots more tax money to spent. Keep an eye on those two groups in whatever county you live in in WV, their increase in tax revenue is due to oil and gas.
http://media.corporate-ir.net/media_files/IROL/10/101196/presentati...
Page 29
Look at the other wells - I think I believe this map.
I'd still like to find out about the Chesapeake Messenger in Wetzel.
Phil
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