AboutFrederick M. Scott CMM RPL Expertise I can answer questions about oil and gas leasing, and give suggestions on negotiating a good oil and gas lease and how to best deal with oil companies or their representatives. I can answer questions about buying and selling oil and gas royalty or mineral rights. I can help with questions concerning forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.
Experience I am a Certified Professional Mineral Manager (CMM) (certified by the National Association of Royalty Owners in Tulsa, OK) and have managed my own oil and gas properties in Oklahoma for over 10 years. I have dealt with many landmen, attorneys, and other oil and gas professionals in the course of doing so. I am also a member of several professional associations and have written articles of interest to royalty owners which have appeared in several industry publications. I have prepared deeds, title work, and done curative for my own minerals; and have acquired a good deal of knowledge on the subject of oil and gas law and landwork in general in the process. I am the owner of Timbercreek Mineral Company, LLC; which was formed as a vehicle to manage family mineral interests, and as a way to facilitate the buying and selling of oil and gas interests for other people.
Organizations NARO, NADOA, AAPL
Publications National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, Landman Magazine, and several royalty owner association groups newsletters.
Question Straight forward, I know nothing about mineral rights, leases, etc. I am one of 75 heirs to mineral rights to 50 acres of property in West Virginia. They are offering $10/acre per year for delay rental for a period of five years. 12% royalty. That's it! Pooling at their discretion. I know mypart is small but should I negotiate for something highter? I asked who the other heirs were and the response was there were many. Duh!
Answer Debra, if possible, I'd get together with the other heirs and negotiate as a group; perhaps choosing someone to represent you from among the heirs, or even hiring an attorney or landman to represent the group of heirs. The oil company would probably give you a better deal as a group than they would individually as it would save them a lot of time.
Parts of West Virginia (I don't know where these are) are worth more than $10 per acre to lease for five years, but other parts are not these days. The "delay rental" you mentioned is probably $1 per acre, not $10. The lease bonus is probably the $10 per acre. The lease will expire after five years unless they drill, or have an extension option written into the lease.
You could check in the local courthouse land records room in the county where the minerals are located and see if any other companies are also leasing in the area where these minerals are. You could potentially get a better deal from one of them by contacting them yourselves.
At the very least, I'd counter with SOMETHING just to see if they'll go up any. Ask for $25 per acre and 1/6 royalty (which is 16 and 2/3%.) Can't hurt, right?
Also tell them you'd like them to add a "depth clause" to any lease you're asked to sign. They'll know what a depth clause is and it's in your favor to have one in your lease.
The "pooling" provision in the lease is fairly common and is generally nothing to worry about.
