Modification: What happens if You Do Not Sign?

Here is my question: The family has a section of land the oil co wants to drill on. The oil co wants a modification signed. They have offered a very large signing bonus to sign the modification (on par with bonuses paid for new leases) and increased the royalty % from the original lease. I only had to ask once for them to raise the royalty % and they agreed. This makes me think they plan to drill.
Problem, siblings who refuse to sign. I have signed, but if they do not can the wells still be drilled and my modification honored or is it probable the oil co will change the Pooling Unit, run the wells away from our land and I "lose out"? - Denver

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Permalink Reply by BirdDog on September 16, 2013 at 5:16pm

Those who have rights to the property(minerals) must sign.

Permalink Reply by Denver Gallentine on September 16, 2013 at 10:53pm
BirdDog,
Thanks. That is what I assumed. Hopefully, they will change their minds. The holdup is because one signed a year ago when the bonus offer was very low. With negotiations we were able to multiply it 16 times and increase the royalties. Now two siblings wants the oil co to resign w/ the one who signed @the low amt. oil co is not interested. - Denver
Permalink Reply by Kathleen on September 17, 2013 at 5:31am
If you're close to the well pad in ohio, then I can't see how they could go around you. Time will tell where the pad goes in.
Is the modification for unit size?
Permalink Reply by Denver Gallentine on September 17, 2013 at 6:49am
Hi Kathleen,
The pad is already in and the three wells going NW are drilled. The SE wells are the ones to run under the property we own the mineral rights to. The modification ended up being on Unit size and increased royalties from 12 1/2% to 14%.
I will keep everyone posted on progress. - Denver
Permalink Reply by J.D on September 17, 2013 at 6:57am

Denver,

Do you mind if I ask what county your property is in?

Permalink Reply by Denver Gallentine on September 17, 2013 at 9:46am
JD,
This is a 156 acre section we have in Wetzel County in Proctor District. The well pad is named Top Ridge Denture.
Denver
Permalink Reply by Mike C. on September 17, 2013 at 10:37am

My advice is to move this into a LLC.  Set up some guidelines, such as voting and representative/agents.  That way everyone is treated as an equal and you can at least settle disagreements by vote.  As it stands now each person has WAYYYY to much say in what is happening.

 

 

 

Permalink Reply by Kathleen on September 17, 2013 at 11:40am
Part of your question was explained to me by an oil gas guy.
The drilling plan should still go as planned but you will be apart of only what your lease allows. Since everyone didnt sign or won't sign this unit then most likely will have more declared pooled units. It would have been easier for the co., to have as little as possible declared units coming off this pad.
For once I'm not 100% sure when they came to you for a unit modification, it was to hold as much land as possible. I agree it sounds like they may drill.
Or they were trying to hold you with those NW wells.
If I could sign for more royalties and get them without the rest signing, I would go for it. Of course the rest of your group is driving your unit size right now, but this higher % opportunity may never present itself again.
As far as I know, you are the first person to post an oil and gas co., up % to get a modification. Good for you.
Permalink Reply by Denver Gallentine on September 17, 2013 at 12:49pm
Kathleen,
It took a year and sending back unacceptable leases three times to get this offer. In large part due to advice and information I got from this site. The first lease I signed several years ago was one where I accepted whatever the oil co. Put before me. I have learned a lot in the years, but I have so much more to learn. - Denver

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