Oil and Gas leases, anybody got experience with them?

**Hawkeye** · 03-21-2014, 05:58 PM

Well, it's that time of year again and I got approached by another company looking for mineral rights.
What did you guys get offered per acre?
How long is the term?
Is it a one lump sum or is it per/acre per/year?
What are your royalty percentages?
What kind of checks are you bringing in per month/per acre?

I just want to compare what I am offered to what others have been offered.

As it sits now,
It's $1000/acre one lump sum
10 year lease
15% royalty
He's claiming about $700 per acre per month.

Thoughts?

**PaxtonShelby** · 03-21-2014, 06:34 PM

I know it depends on the location, but my father-in-law got offered $2500 per acre at his cabin near Emporium - but I'm not sure if that was a one-time price or not.

**steedafied** · 03-21-2014, 07:53 PM

It really depends on the current market and how bad they need your lease to complete their unit. If all your neighbors are leased with company A, it would not do you any good to lease with company B. Because the game is to make one big unit out of many parcels. Many companies are getting more aggressive in the Ohio region for the wet gas that is more profitable. A few years ago we were offering 5K an acre, but the market softened and we are now offering 1 to 1500 an acre and usually 5 year lease.

**Hawkeye** · 03-21-2014, 10:05 PM

Originally Posted by steedafied

It really depends on the current market and how bad they need your lease to complete their unit. If all your neighbors are leased with company A, it would not do you any good to lease with company B. Because the game is to make one big unit out of many parcels. Many companies are getting more aggressive in the Ohio region for the wet gas that is more profitable. A few years ago we were offering 5K an acre, but the market softened and we are now offering 1 to 1500 an acre and usually 5 year lease.

Is that a lump sum or per acre per year?

**steedafied** · 03-21-2014, 11:39 PM

lump sum for 5 years. after five years if there is no drilling you are a free agent or re negotiate another 5 years

**whitesnake** · 03-22-2014, 11:42 AM

lump sum for 5 years. 1000 per acre now is about right, but a few years back it would have been higher. and the percentage is pretty low from what i have seen. depending on your acreage, that is where you can make the real money. i would try to negotiate that

**Hawkeye** · 03-23-2014, 04:54 PM

Originally Posted by whitesnake

lump sum for 5 years. 1000 per acre now is about right, but a few years back it would have been higher. and the percentage is pretty low from what i have seen. depending on your acreage, that is where you can make the real money. i would try to negotiate that

So what percentage would you say is about normal?

And thanks for the info all.

**somethingclever** · 03-23-2014, 04:57 PM

In wash county...4500 per acre subsurface only....18%...more for surface rights too

**whitesnake** · 03-24-2014, 12:51 AM

4500 is a little steep nowadays since all of the areas have pretty much been spoken for. i have seen 17.5(the well is going on that property though), but have heard of up to 20. the guy that told me 20 also tells some tall tales so who knows how true that is. i am sure that you could get an extra percent out of it, but it also depends on what all of the people around you have signed up for. if you will see in increase in truck traffic and or noise from the well site could be bothersome those are some potential ways to negotiate a higher price. at 700 per acre per month, each percent would be about 45 dollars. say you have ten acres, that is 450 a month. 700 per acre per month is pretty high though i think. that would be awesome, but that is way higher than i have seen.