AboutLaura M. FitzGerald, CPL Expertise I can answer all questions related to any oil and gas leases, mineral sales, pipeline right-of-ways, LA Dept of Conservation Units; negotiating with landmen for leasing your property, assisting in locating owners of suspended funds.
Experience 26 years in the field and owning my own land services company; being a royalty owner, and participating in drilling wells
Organizations American Association for Professional Landmen, ArkLaTex Assoc. of Professional Landmen, and Dallas Association of Professional Landmen (DAPL), Women's Business Enterprise National Council (WBENC)
Education/Credentials Certified Professional Landman, attended LSU, Notary Public
Question Hi, I just got a letter asking to lease property that I own that is along the Marcellus shale. Upper north east P.A. . They are offering 1550 per acre for 15 acres at 12.5 royalty . Should I jump on this or try to see If I can get more of a royalty percentage? Also they kept saying to me that cause I own just 15 acres that they dont think that they will drill. Are they just saying that to strengthen there position, by making take the deal at hand ?
Thank you
Answer I certainly would recounter their offer.
12.5% royalty is a 1/8th fraction. I would counter at 3/16ths royalty.
Secondly, they are offering $100/acre - I would counter at $175/acre.
You did not indicate the term of the lease; is it for 3 years or 5 years? Is there an "Option to Extend" provision tied to the end of the primary term? If so, how much are they willing to pay you for the additional years?
If you own 15 acres, you will be part of a 'unit' for a well. Although with just 15 acres, you are not a majority landowner, it has nothing to do with whether they will drill a well or not.
