I'm new to "gomarcellusshale", as well as new to this business. We have a 152 acre farm with "Clinton" gas wells which supply our needs.
We've been approached by Fossil Creek Energy Corp (FCEC) for $50/acre, 12.5% Royalty, and $10,000 if a well is drilled. We are sitting on the Utica Strata. I've carefully read the lease and am very suspicious of the terms. We are consulting attorneys. I don't see any members from Noble County..and some interesting notes from Guernsey which lead me to suspect the FCEC lease. Can they broker a lease after signing "cheap"?
We have news of ARTEX Oil offering leases in our County, they're out of Marietta. Any comment on FCEC, ARTEX, and my suspicions would be welcomed!
Would like to know how you value the utica. Unless you have some new technology the only way of knowing right now is to drill, frack and wait on production numbers. I would tend to say the only information out there that you might use would be the thickness of the Utica and the expected gas/liquid/oil window. Both of these are readily available from the internet.
Mark, we are working with an aggressive mid-sized operator which is getting into the Utica Shale in a big way. They will easily beat Artex's lease offers. We have a client in Noble County that is working with us to lease his 200 acres, and we are interested in forming a Noble County land group to increase our leverage. If you and/or neighbors have interest, let me know. Our fee could come from the operator, with no charge to the landowners. We have ordered all the well logs from the ODNR, and are currently working up estimates of the Utica Shale oil reserves under Noble County, to get an idea of how that compares to surrounding areas, which we may be able to utilize to influence the lease negotiations.
A seminar I attended with an accountant said lease money was taxed as ordinary income, so it depends on your income bracket and your filing status to determine your tax obligation. Presently I receive some royalty on a shallow well and it is added to my income total and taxed as ordinary income. I am not an expert, but just what I have heard.