All the farms around me are are tied up in oil and gas leases. Can I deal...

Asked January 5, 2013, 11:55 AM EST

All the farms around me are are tied up in oil and gas leases. Can I deal with another company for better terms? I have 159 acres of land in Lapeer County, MI

Oakland County Michigan

1 Response

If the same company that has the surrounding lands leased is also talking to you, that might be preferable. If your goal is to have an oil and gas well sooner rather than later, the company that has all the land leased has an easier time obtaining the drilling permit because they do not have to do some lease trading if another company has your land leased. Lease trading might add costs to them. They should have more incentive to make an acceptable lease with you if they already have a lot of land in the area leased, particularly if most of the surrounding landowners signed the “standard” lease, which is a very good deal for the oil and gas company and should provide them with the financial resources to get your land under lease also, but for a better deal to you than the standard lease. On the other hand, if you have two different companies competing for your lease, going with the best deal offered might be best long-term. If we could only predict the future!