What your you prefer 8% of 1000 dollars royalty or 12.5% of 1000 dollars royalty.
Remember the landmen work for the company and their goal is not the goal of the landowner.
With the bankruptcy of Edgemarc, other companies will be coming in to offer what they say is a take it or leave it deal for the right to lease underneath your property for gas and or oil extraction. The offer will be in all likelihood be along the lines of 2 or 3 thousand per acre and 15% royalties downstream which means they can deduct transportation, marketing and other charges off of the 15%. The landowner could in all reality receive 7 or 8% after deductions.
If the landowners would start talking to other landowners and ask for 12.5% royalty at wellhead then the landmen who work for the oil companies cannot say”take it or leave it” With the cracking plant coming on line in a few years the demand for the gas is going to increase dramatically.
Pennsylvania and Texas are the two states with the most gas volume. In Pennsylvania, the building of the cracker plant in Monaca is being built because of access to the gas nearby. It is the same reason why a new cracker plant is being built in Belmont County, OH.
While very few if any landowners hold enough property to be able to demand 12.5% royalty at the wellhead, if landowners would all demand 12.5% at wellhead and 2 or 3000 dollars per acre, then we would hold power as a group.
If enough people are informed about and see the amount of monies that they would benefit then we should be talking to any and every person we know that holds mineral rights to their property.
I am not a lawyer,but my first lease I negotiated the 12.5% at wellhead and 3000 dollars an acre on just 15 acres. The second time around I was offered 15% downstream with deductions and $2000.00 an acre from Edgemarc on a take or leave it basis since i had only 15 acres. Then they went belly up before signing of contract.
The other problem with Edgemarc was they wanted you to sign document first. This is just another delaying tactic they use to push the monies owed to landowner out further.
Please start the discussions with your friends and neighbors and feel free to post or send this to fellow landowners.