As a homeowner, you may feel confident that you can handle an oil and gas lease on your own. However closely you may look at the lease, it’s always better to have a trusted attorney review the lease before signing on the dotted line.
When you need an experienced oil and gas lease attorney, contact the offices of Coghlan Crowson, LLP for all your needs. With more than 40 years of experience, we’ve helped negotiate oil and gas leases for hundreds and can help you too.
What to Avoid When Negotiating an Oil and Gas Lease
If you decide to try and negotiate an oil and gas lease on your own, there are several actions you will want to avoid.
Don’t Contact the Leasing Agent Right Away
Homeowners who contact the leasing agent as soon as they receive the lease in the mail are showing their cards. By contacting the leasing agent right away, a homeowner is subtly stating there won’t be any negotiations.
Once you receive a lease, you should contact a trusted attorney to review the document. This will give you and your attorney time to carefully review the document and make a plan for negotiations.
Don’t Sign Anything Immediately
It may seem tempting once you see the numbers on paper. If you take the lease and sign it immediately, there is no room for negotiation. The initial number on paper is not a set price — you have the right to negotiate. If you were to sign immediately, that lease is legally binding, and you would have no room for future negotiations.
While you can negotiate on your own, having an attorney present for any negotiations will give you a more favorable outcome.
Don’t Say You’re Not Interested
While this may be the case, again, you don’t want to show all your cards. Carefully review the proposed document before making any rash decisions. Also, speak with your neighbors to see if they’ve received similar documentation and make sure you’re up-to-date with changes happening in your area.
Don’t Say Things You Don’t Mean During Negotiations
If you’re going to make bold statements during negotiations, make sure you are willing to stand behind what you’re promising. You lose credibility if you make untrue statements, and that minimizes the power you have during negotiations.
This is another example of how having an attorney can be beneficial. By having an attorney make the negotiations, you can confer with your lawyer before any negotiation statements are made.
Don’t Spend Money You Don’t Have
You may want to start making plans for the money you could receive, and while it’s tempting to make big purchases, you can’t spend money you don’t have. Until you have signed the lease and the money is in your bank account, you haven’t made any profit and could find yourself in a lot of trouble if you go ahead and spend the money prematurely.
What to Do if You Are Going to Negotiate an Oil and Gas Lease
There are a few actions you should take if you do decide to negotiate an oil and gas lease on your own.
See Who Else Has Been Contacted
Whether it’s other family members or neighbors, discuss with people you know about the proposal. You’ll want to make sure you are an authorized representative of your property and can make legal decisions about what happens to the land. You wouldn’t want to sign an agreement only to later find out you were not authorized to do so.
Determine Who You Are Talking To
Before any negotiations take place, make sure you know who you are talking to. You may be speaking directly with a leasing agent or a third-party vendor. Having this information will help you during the negotiation process.
Gather All Paperwork
This is crucial to do prior to signing any agreement. You want to make sure you have all documentation proving your ownership of the property and review this information before proceeding with any negotiations.
Negotiating an oil and gas lease on your own can be exhausting. With the attorneys of Coghlan Crowson, LLP we take the pressure off of you and make the process as smooth as possible. If you are presented with an oil and gas lease, contact our office today to see how our team can help you.