"Landowner Bill" has a problem

Ok, lets suppose that Oil/Gas company "A" has thousands of acres leased & "Landowner Bill" has some land right in the middle of Oil/Gas company "A's" lease holdings.  What if "Landowner Bill" is offered a lease by company "B" that is much more landowner friendly & has a somewhat substantially higher acreage bonus than that of company "A".  Would "Landowner Bill" be better off signing with company "A" and almost be guaranteed to be put in a drilling/production unit in the near future & enjoy the royalty payments, or go for the better lease & acreage bonus & hope that company "B" sells the lease to company "A"? 

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Permalink Reply by Joseph-Ohio on September 1, 2013 at 2:47pm
A landowner decision 100%.

Have to weigh any signing bonus involved alongside / against any differing royallty expectations and personal financial circumstances.

No general formula applies - only landowner specifics.

Consider all aspects of the differing leases as best you're able.

Good luck.

Do the best you can for yourself and family.
Permalink Reply by Silver Dollar on September 1, 2013 at 2:52pm

I'm wondering how often these oil/gas companies sell/trade leases in order to connect another unit.

 

Permalink Reply by Janice L. Hancharick on September 2, 2013 at 6:54am

It happens more often than you know.  This is a subject that comes up in 4-County meetings from landowners w/acreage they're reluctant to sign on ... "hold-outs" that doubt the potential of "strength in numbers" @ the bargaining table,even though they don't have to sign a lease they don't like!

If there is no group in your area that you  feel comfortable with, use a bonafide O&G att'y (not one whose had a course or two) and make the best deal you can.  Don't be wow'd by company clauses about all you're being given w/o knowing what the law mandates anyways.

Permalink Reply by Silver Dollar on September 1, 2013 at 2:54pm

how often does that happen? 

Permalink Reply by Joseph-Ohio on September 1, 2013 at 3:02pm
IMO it doesn't matter.
After you lease you have no control over such unless your lease provides it.
Permalink Reply by Chris on September 1, 2013 at 3:30pm

most time if company A has the majority of the acreage  in X Unit, but company B and C also have a small amount of acreage in the Unit. B and C will participate as working interest holders in the unit according to their proportionate share.  Company A can even drill on B or Cs acreage . So no it really doesn't matter very much, as long as someones drilling in that area.

Permalink Reply by Silver Dollar on September 1, 2013 at 3:35pm

But the royalty payment has to stay true to the lease, correct?  No matter who is doing the drilling?

Permalink Reply by Finnbear on September 3, 2013 at 12:58am

Correct. The lease specifies how any O&G activity will be done on that particular parcel of land, no matter how many times it is assigned. Get the lease terms and bonus you can live with. Let the eventual (if any) driller drill on those terms.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on September 1, 2013 at 6:22pm

"how often does that happen?"

Constantly.  Take the better offer if you're choosing between one or the other.

Permalink Reply by Silver Dollar on September 1, 2013 at 3:29pm

just hoping the other company don't say the heck with Landowner Bill.  He wouldn't sign with us & its just a measly 30 acres amongst thousands.  And still the lease is held with the other company without enough acreage to drill

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on September 2, 2013 at 4:48pm

They don't care about personalities when making units.  If they want to drill they'll reach an agreement with the owner of the other lease.

Permalink Reply by Mark McGrail on September 2, 2013 at 2:02am

SD,

Take the better offer

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