Negotiate from power. Leases

[OilLady]

Just remember, Good thing not cheap, and Cheap thing not good. Don’t give away the farm. Do your homework. Challenge the landman to explain how he or she came up with the bonus value. Ask questions such as: What are the probabilities of success the Oil Company is using? What is the discount rate used in net present value analysis? What cash flow assumptions are they using (price, production rates, costs, taxes, inflation rates)? While the Oil Company may not answer these sensitive and often times confidential type questions, it educates the Oil Company and its landmen that you have a bit of sophistication in your understanding in how bonus is determined which will give you leverage to negotiate and increase the bonus payment. And quite frankly in many instances you will be smarter than the landman as to how bonus are determined.
The attached spreadsheet is an example of determining cash flow, net present value (discounted cash flow) and ENPVs.

more good information here:http://www.mineralrightsforum.com/profiles/blogs/explantion-how-lease-bonuses-are-calculated-and-a-suggested

[Burbert]

THANK YOU for the insight! Most framers
is to lazy to do research/homework
relative to the shysters ***** tryin ta
steal from us. Good oleboysengirls
usually takes what they kin get run ta the
bank and squirrel it away, the goes on
vacation and spends it. Then
whinning/sniveling stage sets in! To bad
so sad says most framers ta one
another.... fharperenritz, eh

[OilLady]

You are welcome. Please read more and learn on this sight:
http://www.mineralrightsforum.com/forum/topics/how-to-remove-lease-extension-1?id=4401368%3ATopic%3A324304&page=3#comments
or FHOA:
http://www.fhoa.ca/

I can't stress how important it is to be informed. The crown offers super low royalties, so it is a battle. The odd numbered township or is it sections? got the mineral rights to the settlers. so that equals about half.