Well I'm sure that Oil being located has the probability of changing the lease per acreage bonus money..Why wouldn't it..but NG is not out ..Story and Headlines wise maybe for a while , while this boom takes place, but NG value is good and here for the duration till the pockets are empty..Pennsylvania will probably do the same thing afterall it is the state of OLD OIL..
Zach, Please make every effort to attend the 4-County Meeting in Shinglehouse on Thursday PM. It will begin @ 6:30 in the Fire Hall, 121 S. Puritan Ave.. You're doing a good job staying involved. I'd like you to see our shape files on the live map.
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I read the question and thought "that's a lot of money....$20,000/acre" Then I thought....the CHK CEO stated that this is better financially better then the Eagle Ford. So I wondered what the going rate was in that area. I went to a website similar to this that concentrates on the Eagle Ford and looked what people were getting there. I was surprised by what I found.
They are getting substantially less per acre, anywhere from $600 to $1500 per acre...but the leases are three years with a three year option. Also, almost all are getting royalty offers from 20% to 25%, substantially higher than here.
What does it all mean? Are they smarter for getting a higher royalty? And why are the leases for a shorter time period? Are there differences in the development costs that require the drilling companies to have different offers or is it due to the expectations and traditions of the landowners? Maybe it is because the parcels are usually much larger so that gives landowners a big bonus even at a lower rate and allows them to be patient for the royalty? Why are they willing to sign only 3 + 3 leases there but insist on 5 +5 here? Is it due to infrastructure? Or a smaller area to drill? Or just more rigs, more workers, and less regulation?
I don't think $20,000 is going to happen. Maybe 5 to 7 K, maybe not. Maybe better to take $2500 or $3000 and ask for a bigger royalty.
I think you are misinterpreting what is being said by Chesapeake.
First Chesapeake has stated that they have 1.25 million acres under lease in Eastern Ohio and paid just over 1 billion dollars for those leases.
They paid about $1000 per acre for what they recently acquired.
Their recent press release used the $20 billion dollar figure to estimate the total estimated increase in value of the stock of Chesapeake to their shareholders.
Apples versus oranges....big difference.
It is if you can find somebody to pay that, but don't turn down a reasonable offer in hopes of the 20K per acre.
It's the second mouse that get the cheese.... third mouse gets nothing.