There are numerous factors to consider before and during the leasing process. The main consideration is to discover who will ultimately be producing your minerals, regardless of which company offers you the lease.
Typically, lease brokers are individuals who work independently or for a lease acquisition company (lease brokerage firm) on behalf of certain operators. Their job is to acquire mineral leases in a specific geographic area for an exploration and production (E&P) company to develop. Brokers may or may not be trained as landmen and may possibly represent more than one E&P company. Though you may receive letters from several different brokers claiming to represent the same operating company, such as Chesapeake, the best way to find a legitimate broker connection is to call or visit the operating company’s website for a list of approved brokers.
Remember, the operating company is the one that will actually drill and produce your minerals. This could, but not necessarily, be the same company that offers you the lease.
Also consider the reputation and stability of the leasing company, the volume of leases they have generated in this market, the company’s relationship to the mineral producer and its commitment to the community as demonstrated through corporate contributions or civic service. Well-established companies with proven track records and drilling success rates will generally produce a better well, which means more royalty income for you. To learn more about the factors involved when considering the lease of your mineral rights, click here.
Before entering into an agreement, learn as much as you can about the individual and/or business that is offering to lease your minerals1.
Getting started is easy. If you own property in the Marcellus Shale, you can contact Chesapeake at Marcellus@chk.com with your property address. A representative will contact you within 48 hours.
Sourcing Reference
1Penn State University Extension service. “Five Important Considerations in Leasing.”