What should I know about the money?

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What does your lease say about a pad site or surface operations?  That will be the first starting point in any discussion of whether you have the leverage, or if Northeast has the leverage.

We don't have a lease yet. They sent me a google earth photo. Road surface prep et cetera estimated one point seven million dollars.

Get them to give you a non-surface lease first and then they will have to give you a SUCA (Surface use agreement) for a pad site. Find you an old school landman or advisor who doesn't work for NNE. You need a lot more information for this deal. 

Am aware. Thank you.

what is your approximate location?

This is in WV? Since you haven’t signed a lease yet, you’re holding the better cards. Finding a good, flat spot to put one is hard, and that pad will likely be used to drill wells that run under a lot of land, not just yours. So don’t let them roll the pad and the lease together into one package. Negotiate them separately.

They owe you a one-time $2,500 to cover property taxes on the land tied up by the pad. You get that whether they drill one well or twenty.

But think of those as the bare minimum, not what you should settle for. Things people commonly negotiate:

  • A payment per acre for the pad itself
  • Yearly rent for as long as the pad is in use
  • Separate payments for any roads or pipelines that cross your land
  • Payment for any timber they cut
  • Selling them water, if you have a source
  • Limits on what hours trucks can run
  • Clear, written terms for how the land gets put back when they’re done

Since wells from that pad will likely reach well beyond your property, it’s also fair to ask for a bonus for every well they drill from it.

Last thing, and it’s important: before you sign anything, have an oil and gas attorney look it over. Make sure it’s someone who doesn’t do work for Northeast.

Here’s the WV law if you want to read it yourself:
https://code.wvlegislature.gov/pdf/22-6A-16/
https://code.wvlegislature.gov/pdf/22-6A-17/

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