Don't shoot the messenger! Ohio Land Management rec'd a late afternoon call from one of our neighbors in Mahoning county. He stated he just signed for $5800 an acre and 20% with Buckeye.
All bets are off landowners! The price of the Utica carbonate shale is now leveling off with the rest of the play. I just hope many of us have not signed for 3K or 4K.
Ron: Perhaps I jumped to a conclusion! Maybe Buckeye Minerals was a landowners group?? Having read a number of posts, I do not care who they are. If they actually got a whole bunch of people $5800/ acre and these people all got paid, and these people all are due royalties of 20%, then they did a great job. Since the thread goes back to 2011, perhaps you can update. I apologize to all if Buckeye came through as advertised on this thread. If they did, we need to know how they did it. We also need to know if marketing conditions have changed since they did it. I do think that my advice about leasing only to established O&G companies is good advice!
In my opinion it was there one and only big deal, and had less to do with their negotiating skills than the oil and gas company wanting some not all of the acreage. Soon after the lease signings some land owners received letters of rejection (not just for title). So did the big for profit land owner group work for the land owners ? Not really, the group allowed the o&g company to cherry pick.
They are a for profit land group. They do not drill wells. They are the CX of OH.
Many land owners were able to negotiate similar terms and leases all on their own, and they didn't have to pay the fee.
Thanks Fang: Sometimes I regret my posts but appreciate corrections. I am not too sure why this very old thread was revived. The Mercer County Pa mess and the threads related thereto are more exciting, more challenging, and also offer many insights by legal professionals to the complex issues that can happen in this dirty business of O&G leasing!
If you read back through this thread it's like hind sight. Much of what was said came true. Maybe we can all learn.
Here it is , almost 18 mos. later. How many of these landowners were actually paid vs. not paid? Did "due diligence" and title defect weed many out?
It was around this time that CX signed a bunch of acres in a big group deal with Hilcorp (Lawrence County,PA) because they claimed Shell wouldn't deal with them. It was a smattering of property all over the County. To Hilcorps credit , I never heard of them cherry picking and if some weren't paid it was likely title defect related. I believe these folks got 3250/acre , paid 8% to Co-Ex , and forgo 5% OF their 18% royalties for the first 5 years of production. (pleases correct me if I am wrong)
At this same time I signed on my own with Shell for 3000/acre and 15% gross. I was ecstatic , as just a year prior , East Resources was leasing in our area for 1500/12.5%. To the best of my knowledge , Shell is currently offering 3250 and 18% gross here.
Recently , Hilcorp assigned 400 parcels to Shell and Shell assigned 100 parcels to Hilcorp. Finally deals are being made that , hopefully , will bring our County into more production and get some royalties flowing.
In retrospect , it is my opinion that this big group put together by CX in Lawrence County actually set us back a couple years. With holdings scattered across the County , it has taken nearly 18mos. to even begin the lease swapping process between the two majors wishing to develop our resource. All this talk of competition being healthy for raising compensation dollar amounts for landowners rings somewhat hollow when such delays are exposed.
I would think that if such large scatterings of properties are to be assembled , it would be far more beneficial to ALL involved if more flexibility were allowed. That is , if the holdings are not contiguous and they do not all lie within respective areas of interest to any one producer , then why should they be marketed as an "all or nothing" comodity? This serves only the interests of the "marketer" and ignores the interests of each individual landowner within the so called group by postponing the development process. I am sure this tactic has delayed Lawrence County's progress.
I and others have contended for a long time that instead of increasing bonus money and royalty percentages the large CX type land owner groups actually suppressed them. The large groups eliminated competition.
Thanks for explaining this so well.
Thank you Fang. Just common sense to some of us I guess.