I'm supposed to be privy to every nonsense rumor circulating around the play? Please. Rumors are rumors. WHERE'S THE BEEF? You post up a video of some guy that is the CEO of a tiny E&P company that doesn't even operate in the Marcellus, who is trying to flip for money, who states that in SOME shale plays, you COULD see AS MUCH as $20,000 per acre. I have no use for such conjecture. Neither should you, or anyone else for that matter, hence my posting as much.
For someone who is so interested in Marcellus value, I believe it would be in YOUR best interest to get up to speed on the GLARING OMISSIONS from that video.
Is that 20K for the landowner for a new lease?
Is that 20K if it's been HBP?
Is that 20K for every parcel, or for just for unit sized blocks?
Is that a price for selling off 50K acres of mostly contiguous ground after taking a few years and tens of millions of dollars to install pipelines and infrastructure, prove the area and selling the production alongside the acreage?
You can bet your rear it's the last of those. And I STILL don't know if you'll ever see those numbers in the Marcellus, and if you do it won't be anytime soon. You can sell a a glass of water to someone in the desert for a lot more than you can sell a snowball to an eskimo. So yes, there were people drawing UNREALISTIC EXPECTATIONS from that video. All I did was put it into perspective, which I will continue to do for those who appreciate it.
India's Reliance buys a large block of Marcellus acreage for over $14,000 per acre.
Mr. Knapp, if you have a problem with the video, CALL them.
I posted the video, it says what it says ! (READ THE TITLE)
Who said anyone was getting $20,000 at this point in the Marcellus ? (for all we know)
$20,000 + out west, yes and for the landowner for a new lease? Make it around $30,000 and that was at the peak of gas prices. Take it down to 1/3 of that and we're talking $10,000.
I don't care if the $20,000 to $30,000 an acre lease was for 200 property owners in downtown Pittsburgh, Dallas, any city, an acre is an acre of NG underground.
DEVELOP.........DEVELOP........DEVELOP and time will tell.
PEOPLE, KNOW YOUR INDIVIDUAL SITUATION
My...quite a discussion here. thanks gasoholic for the video link...and my what a quick way to hear what really is happening. I think we spent months doing the lease...and still didn't know what to expect....so I quickly learned at that link about how they lease low (if they can), sell high (surely they plan to). and maybe they may drill and the pie slice may be smaller than the landowner expected or wanted...but the entire focus is on getting that NG out of the ground and paying the bills.
Thanks Lou, what can I say? I read the article at the link you provided...and several times these past few years I have been concerned about our leases ending up in the hands of other nations. Not that our country hasn't leased in other countries , but I was hoping that this would be just a USA thing....not so. I didn't know if Pa. Dept . of Revenue would get involved in the regulations to limit just to whom these leases could be assigned to overseas....and I see now that there are no regulations in that area. Why the concern?....don't we have enough stuff 'made in China' to show us that we need to not only make the product but produce and sell it also. Several overseas companies will pay huge amounts of monies for those leases and even help in the drilling costs...but when it comes time to renew the leases will they offer huge amounts of monies to us landowners or would the US companies do us all better? Time will tell as we are all learning. Now it has become a worldly enterprise not just USA. Anyone care to read what Lou posted in his recent discussion entry so you know what I am talking about? thanks Lou...here is the link that Lou provided.
I suppose it is possible to write in to a lease agreement that you would get a % of the profits from any/all lease flips.
It all boils down to knowing the value of what you are selling/leaseing.
If I lease an Apt. to someone for $500/month and allow sub leasing...and they turn around and sub lease it for $800/month....should I expect any of the additional $300/month? NO! Unless it is in original contract.
I'm not defending the O&G companies....but geez use common sense here folks!
Just beause some Company may double thie money on your lease doesn't make it any different than any other type of lease.
I think just because the total $$$$ that may be made from these leases is so huge, it is making folks too greedy and blind to the fact that companies WILL exploit your ignorance....seller beware applies.
BTW....I own land in Ohio...mostly all HBP....and am just waiting on this all to play out.
Hi every one...and happy new year to you!
I really understand that is is a global economy and certainly we all see that...yet I think that our tax rates and structure for the USA don't have necessarily the rules and ordinances that would protect our situations for foreign owned leases. For example if your mortgage on your home is owned by investors in Europe (which maybe it is) and they wanted to issue new rules and regulations for their investments here in America...would our housing authorities in America have any thing to say about it?
Also with our need in our economy for the dollars to be invested here in America then we should welcome whomever has the capability and investment money to drill the wells and place the pipelines...but what if the company is not under any obligations to the US policies? and are there any special regulations yet for all drilling in the shale? These are some of my concerns when doing business with a global world and why I made that remark with the link provided by Lou. And what if when the royalty time comes the foreign investors have different ways of doing business than what is promised by the original contract regarding net and gross profit?
It may be best to start another discussion on this subject...but I wanted to reply to Wadea about this....as my concern is not to turn away the fact that it is a 'global economy' in the working...my concern is how that works with our situation here in America and present and for the future. We sign contracts that have assignability clauses so we cannot limit at present just who they could assign to...(of course that is up to each contract individually or collectively for a group)..but when we do have wells dug and a working relationship with the company with the lease...will we all speak English? will we need an interpreter? there comes a point that we need to know to whom we are doing business with, I thinkso.
In repy to what Paul wrote above....yes they can turn the profit...but many of these land sales agents are taking advantage of the lack of knowledge of the landowners and telling them they can't do any better than the offer they are getting and then signing the lease and within a year the lease is being sold at sometimes several times over the amount that the landowner was given. I think there is a standard of profit margin that most expect in any sale of product and that is why there is some regulation to protect people from being swayed by shysters. but we do not want to consider these oil companies as shysters and do business, do we?
So these forums are most helpful.