Will holding out on leasing until very end result in better bonus consideration and lease??

If a gas and oil company need your land to complete a unit can the landowner get a higher bonus and lease on the landowners terms eg demand a no deduction clause for royalties??

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Permalink Reply by Chris on June 27, 2014 at 2:56pm
Depends on how much acreage
Permalink Reply by Dexter Green on June 27, 2014 at 4:06pm

The answer is yes.  Or no.  It depends.  If they force pool you then you're in a whole different world of bureaucracy.  

Permalink Reply by rmc on June 28, 2014 at 12:39am
I agree wit Cris depends on how much acreage and how you're acreage lays with the companies drilling plans. Example if you're property was to impact several drilling pads instead of just one I believe that company would be pretty much eating out of you're hand.
Permalink Reply by Kathleen on June 28, 2014 at 3:54am
What state? That matters too. In PA they can just run along your property line without leasing you.
Since you did not list where you are there is a lot to look at.
One big point I would think about is how long do you want to wait?
Waiting on a lease could mean you never see one. These co's., move from area to area in a blink of the eye. There's times of high lease activity with high amounts that fall off after a few months and do not come back for years or ever.
If they move out of your area after it is mostly leased, your grandchildren could be the ones leasing it for you.
Look at Arkansas, look at PA, look at parts of ohio. The co's., came in fast with big promises to leave just as fast. Its all a gamble.
I strongly suggest holding out for what you feel is fair but holding out may mean $0 or a horrible lease later.
I know someone that was the 1st property off the pad site on a multi permitted well pad. They held out until after the pad was made and drilling started. They got mid range signing bonus under 3 grand and a 15% net lease. So much for holding out :0(
Permalink Reply by adam sorell on June 28, 2014 at 4:46am

It is in Belmont COunty Ohio. 10acres. I'm stuck because i signed with a company that didn't pay me and won't return my calls.I have to get the memorandum released. All my neighbors are leased already. So i figure after i get the release I'll be like the only one unleased on the hill. All the parcels in that are are mostly small acreages out of city limits.

Permalink Reply by Jim Litwinowicz on June 28, 2014 at 6:37am

adam; in your situation, I suggest you contact a couple of the companies that are active in your area. Especially who your direct neighbors are signed with. If they want/need your property they will probably assist you in getting that release.  The other option is to hire an attorney and get it doe.

I would suggest not waiting too long as once they determine the drilling units, it will be harder to get into one. And with ten acres, they can easily work around you.

Good luck

Permalink Reply by Frank Walker on June 28, 2014 at 6:18am

Adam, in reply to your OP:

Yeah, but you gotta know when to hold (out on) 'em, and know when to fold.  You would hold out for at least the "going rate" if they are attempting to "low ball" you.  When you get them up to the "going rate", if they really need your land and if drilling has commenced, you might be able safely to squeeze an additional ten to fifteen percent of of them.

After that it's a crap shoot.  At some point they might just declare "to hell with you".  That's when you know you've pushed too hard.

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