Replies to This Discussion

Permalink Reply by Hoodwinked2 on July 18, 2011 at 7:47am

I undestand the power in numbers concept, however, what guarentee is in the lease that your land will be accepted?  Ive read several blogs stating several participants received rejection letters. If you havent researched your mineral rights, that is one matter, but to have your land tied up for an extended period of time and miss other opportunities, just to get rejected is another matter. Is it possible the land groups pick the cream of the crop and the others are just left holding the bag ?

Permalink Reply by Finnbear on July 18, 2011 at 8:39am

If the group does their homework and makes the deal correctly, the participants are protected from this, provided they actually own their mineral rights. Most groups negotiate with the energy companies on a "winner takes all" basis, forcing the lease buyer to take anyone in the group who signs and whose mineral search reveals they actually own the rights. Any group who does not include a caveat such as this is wasting the time of the participants and is possibly costing some of its members a lot of $. If the deal is written correctly, the only reason for a rejection letter would be a mineral rights ownership issue where the lessor didn't really have the right to sign the lease over to the lessee.

Permalink Reply by Des Wertheimer on July 18, 2011 at 9:28am

Well, it depends on how the group is formed and managed. At Ohio Landowners, you dign a non binding agreement of representation. Basically, you are not locked in to anything and can get out at anytime. I dont believe any other group offers that kind of latitude for the landowner. That is why they are having so much success. Rejection can happen in any group. The majority of rejections are due to the landowner not owning the minierals, not that they were left out from the group. Any in this case, if you dont own your minerals, no one can help you.

Permalink Reply by Steven Gardner on July 18, 2011 at 11:20am

The kwgd Williams group operates the same way .. you sign an engagement letter and you are not bound to them until you actually sign a lease. They need to know how much acreage they have to put up for bid. I'm sure they weed out the ones that do not own the minerals prior to signing a lease but if you are in the group then you get the same deal as everyone else.

 

Does the Ohio Landowners group have a website or some means of getting info out to the public ?

Permalink Reply by Keith Mauck (Site Publisher) on July 20, 2011 at 3:33pm

New Guernsey Group - http://gomarcellusshale.com/group/guernseycounty

Permalink Reply by Anthony Hunter on July 20, 2011 at 5:10pm

Supply vs demand.  As long as there are individuals willing to sign for $1,800, there is no need to offer $2,200.  If individuals are patient and put off signing, it is highly likely that the demand be higher than the supply.  Thus, the price per acre will increase. 

 

Please, please, please, have your lease reviewed by your own attorney knowledgeable in oil/gas leases prior to signing.  If your are giving up your rights on your property from where you are standing to the center of the earth, then would you not want to really know what you are giving up and for how long? 

 

Then, contact your accountant and discuss the tax consequences of the timing of the checks your will receive, and who's name the checks should be in.   Your accountant should be a properly licensed Certified Public Accountant, by the way. 

 

Attending one seminar will, most likely, not make you an expert in oil/gas leases and their taxation.  So, do your homework and consult with someone who is.  

 

"An ounce of planning is worth a pound of cure"

Permalink Reply by Randall on July 20, 2011 at 11:14pm

Counterpoint to this.    One bad well in Guernsey, and the terms could drop very quickly.   If you have a solid offer on the table, you might hold out for more, but you take a risk.    I usually do a "decision tree" for this, helps me see which path is likely to make more money, given the odds of the Utica panning out.  Right now, I am guessing (and that's all it is)  70/30 that it ends up being at least marginally economic.   Keep in mind that shale plays are notorious for having sweetspots, and rotten spots.....  If drilling shows you are in a rotten spot, you will not get any offers, let alone a good one.   There are whole counties in the Marcellus where people are begging to get leased, after holding out.    Further drilling has shown those areas to have poor productivity, so they will not get leased, at least until gas prices go up quite a bit.

Permalink Reply by scott peterson on July 20, 2011 at 11:22pm

Good point. When do you know when to pull the trigger and when to hold?

Permalink Reply by michael j belaj on July 21, 2011 at 4:24am

Scott Pull the triger when you have a clear target not when the gun is pointed at your head if you have a good deal and it is fair go for it. tks Mike

Permalink Reply by Michael Lawrence on August 7, 2011 at 8:59pm

The problem with having most attorneys read the lease info is that they dont have a frkn clue...  You need someone who is knowledgable in the business with connections.   i am that guy...attorneys charge you money...  i am paid by leasing and O&G companies...  I am part of meetings in many counties... and can tell you who is leasing, ( which companies) and what the pricing is to be... bottom line.. in a couple of weeks.. alot of companies will be shutting down...

Permalink Reply by michael j belaj on August 8, 2011 at 3:06am

Mick Iwould like to talk to you please emaile me @ mbelaj2rfontier.com. thanks Michael j Belaj

Permalink Reply by Jon Henderson on August 8, 2011 at 9:18am

Why will they be shutting down?

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