In this article, you can discover…
- The importance of understanding and verifying your mineral rights.
- The risks of accepting an oil and gas company’s initial offer.
- How an experienced attorney can help you negotiate successfully.
1. Not Verifying Ownership Of Your Mineral Rights Before Negotiating
Your ownership percentage or the number of net mineral acres that you own will significantly impact your bargaining position. The more interest you have, generally, the better a bargaining position you are in.
This is especially important, as within the last several years in West Virginia, laws have been passed that strongly favor oil and gas companies and place minority interest owners at a disadvantage. The “West Virginia Cotenancy Modernization and Majority Protection” Act and the “Force Pooling” Act both enable gas companies to underpay owners in certain circumstances.
Understanding the percentage of interest you own helps you dictate your bargaining position and makes it harder for the oil and gas companies to bully or pressure you into unfair agreements. With the right information, you can understand whether the terms of a lease truly reflect a good deal or if terms should be negotiated.
2. Forgetting To Limit Surface Use In Your Morgantown, WV, Oil & Gas Lease
Generally, if the oil and gas company wishes to make extra use of the surface of your land (for example, placing a well pad there), these terms should be subject to an entirely separate agreement. This helps protect you, ensures you receive appropriate compensation, and keeps oil and gas companies accountable for how they use the land that you’ve given them access to.
3. Accepting A Company’s First Offer For An Oil And Gas Lease In Morgantown, WV
An oil and gas company’s initial offer is rarely the best offer. If you take the first number they propose, you’re leaving money on the table. If you negotiate, you can not only secure a better offer but ask for other lease terms. For example, you could request the right to potentially lease other strata of your property later or negotiate to limit the number of deductions that the company takes from your royalty checks.
Attorney Eddie Wagoner is a knowledgeable, principled oil and gas lawyer serving West Virginia. For over 15 years, he’s helped clients just like you understand how to get the most out of their oil and gas lease agreements, negotiate well, and profit fairly in the long run.
Have questions, or in need of legal guidance? Reach out to Hansberry & Wagoner, PLLC, for an initial consultation today!
Call for a Consultation! (304) 443-9138 (Morgantown) | (304) 898-8484 (Bridgeport)
4. Neglecting To Negotiate For Indemnification Provisions In Your Oil & Gas Lease
An indemnity provision will require the oil and gas company to pay any judgment that you become obligated to as a result of their drilling. For example, imagine you own a farm and the oil and gas under it. You lease this land to an energy company, they put a well pad on your property, and the well pad’s brine tank leaks onto your neighbor’s land, destroying their crops.
Should your neighbor sue you for damage to their crops, the identity provision requires the energy company to pay your neighbor for those damages or else pay for an attorney to defend you in court. A good indemnity provision will help you avoid liability and even attorney’s fees and puts the onus on the oil and gas company.
5. Trying To Negotiate An Oil And Gas Lease Without An Experienced Attorney In Morgantown, WV
When negotiating oil and gas lease terms, your bargaining position is tied directly to your ownership interest. An experienced oil and gas attorney will understand how much that interest is worth and current market conditions in your area.
A skilled attorney will break down the implications of everything proposed to you. They’ll ensure that provisions are in place within the lease that will maximize your returns and help you earn more from any future structures put in place.
A good lawyer will also understand the nuances of deductions and help you hold onto more of the money you’re owed. Without the right legal help, an oil and gas company could swallow up half of your royalty checks with deductions, leaving you with 10 to 15 percent less than what you’re fully owed.
Don’t try to negotiate with energy companies alone. Allow an oil and gas lawyer to carefully examine the lease agreement being proposed and ensure the right clauses are in place to protect you in the long run.
Still Have Questions? Ready To Get Started?
For more information on West Virginia Oil And Gas Leases an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (304) 443-9138 (Morgantown) | (304) 898-8484 (Bridgeport) today.
Attorney Eddie Wagoner is a knowledgeable, principled oil and gas lawyer serving West Virginia. For over 15 years, he’s helped clients just like you understand how to get the most out of their oil and gas lease agreements, negotiate well, and profit fairly in the long run.
Have questions, or in need of legal guidance? Reach out to Hansberry & Wagoner, PLLC, for an initial consultation today!
Call for a Consultation! (304) 443-9138 (Morgantown) | (304) 898-8484 (Bridgeport)
