January 1, 2012 by Eric Johnson Gas and Oil Law 0 comments
Thoughts on Group Leasing or Mineral Selling
We are often asked whether a landowner should join a “group.” The short answer is “it depends.” Certain landowners will benefit from joining a group while others will do better standing alone.
Factors we consider include:
- How many acres do you own?
- Are you willing to sign a lease that allows the company to drill on your property?
- Are your neighbors leased?
- If your neighbors are leased, did they sign with the same company that has approached you or a different company?
- Is the group made up of large landowners or small landowners?
- Is the group centered around your property or spread out?
- If the group is spread out, how many townships or counties does it span?
- Has the group already been approached by any companies?
- Does the group want you to pay a fee to join?
- Does the group want you to commit to joining the group for some period of time without guaranteeing terms?
Depending on the answers to these questions we may advise you to join or not join a landowner group. There are many different groups available. We often put our landowner clients into “groups” where we feel it benefits them. If we think your position is stronger by yourself, we will advise you to stand alone.
You should speak to an attorney to figure out if you will benefit from a group situation. As always, do not sign any documents committing you to anything until you have consulted an attorney.