When negotiating an oil and gas lease, everything is on the table. In a sense, there is no real “standard” oil or gas lease agreement in the United States. Therefore, if you are considering signing a contract, it is important to become familiar with the best oil and gas lease negotiation tactics to maximize your financial opportunity.
Top 3 Tips for Oil and Gas Lease Negotiation
If you own your mineral rights, oil and gas companies may be interested in exploring your property. With the right contract and reserves, an oil and gas lease agreement can be a mutually beneficial financial arrangement. For this reason, we’ve put together the three most crucial steps you can take to leverage your stake in any oil or gas lease.
1. Start Off by Saying “No”
Generally, a good rule of thumb is, “never take your first offer.” If you just received a letter, email, or phone call from an oil company with an “unbeatable” contract, do not rush to sign on the dotted line. Chances are, if one company is interested, many more will be. This brings us to our second tip…
2. Take Your Time
Mineral rights are a valuable property, just like your home. Imagine that you are leasing out your subsurface to an oil and gas company just as if you were leasing your home to a renter. You will want to make sure that your co-signer is vetted and reputable. Watch out for companies trying to get you to sign offers that will disappear in less than a day.
3. Call an Expert
So long as you haven’t entered into an agreement before consulting a professional, there is still an opportunity to take the best step for oil and gas lease negotiation. Calling an expert is far and beyond the best way to leverage your buying power in any agreement. When it comes to oil and gas lease negotiations, industry experts are always going to be your most powerful resource.