Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on July 2, 2009 at 16:42

Marty. The first opportunity, IMHO, is to review and amend the lease language if needed. Once you have an acceptance of the changes you deem important, negotiate the bonus to extend. Don't go over board but prioritize what you feel makes for an advantageous long term contractual agreement. Then look at the time remaining on the initial term of your existing lease and don't be concerned about coming to an agreement more than 30 days prior to the expiration date. When the date draws near the lessee will be more likely to accept your conditions. Do not forget that you are in the driver's seat. I prefer to counter based on the length of the extension granted. For example, one year $1,000/acre, two years $2,000/acre, three years $3,000/acre. Put your negotiating hat on and be creative. Good Luck.

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Permalink Reply by Wanda on July 3, 2009 at 14:13

Do they give extensions on your lease if they have drilled in your 240 acre section?

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Permalink Reply by Dion Warr, CPL on July 8, 2009 at 10:19

Wanda:

I have seen you allude to this before. Most regular sections are ±640 acres. Why is yours so small?

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Permalink Reply by Wanda on July 12, 2009 at 16:56

Sorry.its 640,hit the wrong number,wasn't paying attention.

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Permalink Reply by Dion Warr, CPL on July 12, 2009 at 16:58

S'alright.

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Permalink Reply by Mac Davis on July 3, 2009 at 10:07

Definitely consider bad lease terms in the original lease that you'd like to drop.

I'm thinking things like no surface access to your property. I'm sure there are other terms it would be smart to avoid, but can't think of them right now.

Is there a good list of lease terms people should ask for on the site?

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Permalink Reply by The_Baron on July 6, 2009 at 5:04

good lease terms will depend on individual circumstances.

restricing surface use could resrtict development of your unit, may not be in your best interest. Sounds like a good idea for a blog.....

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Permalink Reply by Mac Davis on July 7, 2009 at 15:45

I'm thinking that surface use should be negotiated with specific details when production is ready to start, rather than blanket "do anything you want" clauses in the lease.

I'm also thinking of owners of small tracts of land. If you own 10 acres out of a 640 section, you probably aren't going to be the dealbreaker. If you own 300 acres, you probably want to negotiate on what goes where anyway.

As you point out, it's not in your best interest to be unreasonable and cause them not drill your section.

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Permalink Reply by Wanda on July 7, 2009 at 13:23

If they have drilled but it has not been put on line and producing by the time the lease expires,will they pay to extened the lease?

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Permalink Reply by Anita on July 8, 2009 at 9:40

as a landowner,how would I get in touch with Encana?

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Permalink Reply by Skip Peel - Mineral Consultant on July 8, 2009 at 10:54

Call the office of Mark Virant 214-987-7156. Give someone on his staff your section-township-range and request to be contacted. That being said, I prefer that my landowner clients don't call but bide their time and do their homework until Encana (or any operator) finds them. By contacting them you invite less than their best offer. In fact probably their worst. But it will at least get a conversation started. Good Luck.

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