I need advice about leasing the mineral rights we own in the Marcellus shale field.?
My husband and I have been contacted by landmen offering us a contract to lease our mineral rights.
We live in the southern area of the Marcellus Shale field.
They presented us with a contract. At the top of this document it is titled PAID-UP OIL & GAS LEASE.
The lease outlines terms and conditions. The company wants to pay us up-front for a five year lease with the option to lease our mineral rights for a second term at double the amount of the first lease. They have a separate form with the amount (.00 per acre)calculated for us to sigh. The calculated amount adds up to over 00. I haven’t signed any of the documents, because the landman says that they will give us a .00 check with the remaining sum to follow in 30-60 days.
The paid-uplease clearly states "no verbal negotiations apply." The reason I haven’t signed is because it seems to me like if I sign a PAID-UP OIL AND GAS LEASE I should be getting four thousand and some dollars. not .00!!
Are these guys trying to rip us off?
May 4th, 2010 at 2:12 pm
All lease agreements will say paid-up but I would not sign without help. $10 per acre for a bonus is far from a decent offer. You didn’t mention the royalty you were to be paid which should be around 20% to 25% and as for the term, I would want to sign but for only 3 years with say 2 year extension offer. if you need serious help I have been a buyer of mineral rights in many states like North Dakota, Colorado, Oklahoma, Texas and other states with many years experience and could help you further if you want to email me. My email address is:
tm59707@classicnet.net
May 4th, 2010 at 2:12 pm
I think you are very correct – in your assumption that no other money is forthcoming – what a rip off! All terms and moneys must be in your hands (or an escrow company) pending recording of the lease. $10.00 is not a very good sum for the mineral rights – the paper work should state that upon verification – you should receive $3990 more dollars – and it should be written out! That check for $10.00 is considered a GOOD FAITH payment – and subject to be added to the Escrow! If you have any doubts about this deal – get a lawyer to handle it. You should also ask for a ROYALTY for minerals removed from your property – and that should be no less than 5% of the gross income.