Oil & Gas Lease Negotiation
WV Oil And Gas Lease Negotiation Lawyer
Negotiating oil and gas leases in West Virginia (WV) can be challenging and usually involves dealing with a full team of attorneys representing the oil or gas operation. With the help of a WV oil and gas lease negotiation lawyer from Windom Law Offices, PLLC, you can protect your rights while getting the compensation you deserve for the use of your property.
An attorney with experience negotiating oil and gas leases in West Virginia can protect your rights and work to achieve your monetary goals in the lease agreement. Additionally, your lawyer can readily identify important lease terms and conditions and advise you on how they will impact your rights as a property owner.
A WV Oil And Gas Lease Negotiation Lawyer Explains How An Oil and Gas Lease Can Protect You
When you own the oil or gas on your land, you have the opportunity to create a lump-sum payment or stream of income if you decide to sell or lease the surface or sub-surface rights to your land. However, businesses negotiate for their own benefit, not yours. You need experienced legal counsel to help protect your rights.
The parties to an oil and gas lease are typically the landowner as the lessor and the oil or gas company as the lessee. In West Virginia, leases usually have an initial term between one and ten years giving the company an exclusive license to explore the ground for oil and gas.
Should the company find that the land produces oil or gas, a secondary term begins and can last for as long thereafter as desired if oil and gas production continue on the site. These and other terms can greatly impact your use and enjoyment of the property. If you have the opportunity to enter into a lease, contact West Virginia oil and gas lease negotiation attorneys for help.
Financial Compensation A WV Oil and Gas Lease Negotiation Lawyer Helps You Receive
Entering into an oil and gas lease agreement can result in significant financial compensation for the landowners. While each WV oil and gas lease negotiation may result in financial compensation unique to the situation, there are some standard financial terms often included in the lease. In particular, landowners may receive one or more of the following forms of monetary compensation:
- Cash bonus: An upfront payment, typically calculated on a per-acre basis
- Delay rental: Annual payments made after the first year to spread out the cash bonus over several years
- Royalties: Payments to the landowner as compensation for the owner’s share of gas production, with the minimum in West Virginia being 12.5 percent
- Shut-in royalties: Payments to the owner of a set royalty when the well is not producing
Significantly, WV Code § 22-6-8 prohibits lease agreements providing a flat royalty fee for a producing well. As a result, an owner has the legal right to receive a percentage-based royalty fee, which have historically been a 1/8 or 12.5% royalty, free of all costs.
The landowner can expect an initial lease offer from the oil and gas company to be significantly lower than fair value. However, working with an experienced WV oil and gas lease negotiation lawyer can help you reach an agreement for the compensation you deserve.
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Key Provisions A WV Oil And Gas Negotiation Attorney Seeks To Protect Your Interests
Like financial compensation, the terms and conditions of an oil or gas lease vary from one situation to the next. Lease agreements generally include details regarding the company’s rights on the landowner’s property, when the business can use the land, the period over which the company has rights and how much oil and gas can be produced. An oil or gas lease commonly includes one or more of the following terms:
- The granting clause specifies what the landowner is granting to the oil and gas company
- The primary term is often a term of fixed years for the lease, after which a condition may activate an extended or secondary term
- Commencement of operations is when drilling or other relevant operations begin and may be used to define when an oil and gas company can hold an oil and gas lease past the primary or extended terms
Pooling or Unitization dictates whether an oil and gas company can pool the landowner’s property with adjoining properties to form a production pool
Surrending A WV Oil And Gas Lease
It is important to understand how to protect your rights while negotiating oil and gas leases in West Virginia, but you should also understand how to end one legally. WV Code § 36-4-9b and the terms of your lease govern these circumstances.
When an oil or gas lease contract terminates, expires or is canceled, the oil or gas company must deliver a surrender to the landowner, discharging the owner from the lease obligations. The lessee must deliver the notice within 60 days of the lease’s termination, expiration or cancellation.
Under WV Code § 36-4-9a, a landowner may cancel an oil and gas lease for nonpayment or delay of payment only after submitting a demand for payment. The oil and gas company has 60 days to pay the outstanding total due from the date of the demand for payment.
Contact A WV Oil And Gas Lease Negotiation Lawyer To Protect Your Investment
When negotiating an oil and gas lease in West Virginia, you need to understand how lease terms and West Virginia law impact your rights and obligations. An experienced WV oil and gas lease negotiation lawyer at Windom Law Offices, PLLC can help. To learn how we can help you, contact us today by calling 304-643-4440 or complete our online contact form.
Windom Law Offices, PLLC
For a consultation, please call our office or complete our online form.
304-643-4440 | 866-451-9642
101 East Main Street, Harrisville, WV 26362