Check out our Local Shale News links to get "In The Know"
Tips:1. Before selling or leasing your mineral rights, ensure that you actually have ownership of your land's mineral rights. In some deeds the fine print will exclude the buyer from rights to the minerals or logging on the land. If the mineral rights are under another person's name, see if they are willing to sell or convey the mineral rights. If your deed doesn't include a section about the mineral rights, check with your county courthouse to see who is listed as the mineral rights owner.
2. If you are being contacted about selling or leasing your mineral rights, do your homework. Talk to your neighbors, they are likely being contacted as well. Make sure you are not underselling your rights.
3. Read the lease! The lease is often 5-10 pages for a reason. Leasing your mineral rights isn't as simple as allowing them to drill. The reason they are contacting you is because they think there is potential oil or natural resources under your land. The lease may, in some cases, give the oil companies right to use your land for storage, run a pipeline, or whatever suites their needs. If you are uncomfortable with stipulations in the lease, voice your concern. It's usually not something that is going to be a deal breaker for them, but could be for you. If you need help reviewing or negotiating the lease, consult a lawyer.
4. Royalties are explained as the amount of money you will earn from the drilling of oil on your property. Since there is often no guarantee that oil will be found on your property, the oil company will offer to lease the mineral rights for a certain amount of time. During this time, if they find oil on your land, you will earn royalties from it. If no oil is found, you will make a small monthly royalty until the lease runs out. The lease is often five (5) years; therefore, make sure you review this especially if you are thinking about selling your house during that time.
5. The money you earn from mineral production is taxable. When the rate of production fluctuates up and down, your income will coincide with this fluctuation. This can make it difficult to plan on how much you will owe in taxes. Work with a tax adviser so that you are up-to-date with your tax liability. This means, keep your paperwork, and know what you are responsible for.
6. Transferring ownership is necessary when the owner of the mineral rights is deceased. The owner can transfer the mineral rights or percentages of the ownership in their will. This ensures that the royalties are paid to your family.
7. There are individuals and groups of buyers that will try to buy your mineral rights for a small amount of money. They will in turn lease those rights to an oil company for a much higher amount of money. The bottom line comes down to knowing what your rights are and how to maximize those rights while supplementing your income.
8. Expect pricing per acre to vary per township and is subject to change daily.
Landowners GroupsA landowners group is a group of local property owners and neighbors who come together to use their collective acreage as leverage to negotiate the best oil and gas leases. Working with the landowners group can be easier for the landowners and the oil companies. Negotiating collectively, landowners have a greater possibility of receiving the best oil and gas lease possible. Buckeye Land Holdings works together with landowners and landowners groups to provide the best use of the land.
Contact us today to become a partner with Buckeye Land Holdings.
Ohio Farm Bureau:
Ohio Oil & Gas Energy Education Program:
Department of Natural Resources:
Penn State Marcellus Center:
Geology.com – Oil and Gas Information:
Energy In Depth:
Oil and Gas Financial Journal – Oil & Gas Company Related News: