I did a little speculation below:

Is the Bonus or Royalty more important ??? Both???

The density of well drilling in the Marcellus appears to be about 1 well for each 40 acres of productive area.

http://www.binghamtonsustainability.org/files/gas/What%20Is%20Diffe...

Although a 20% royalty appears to be optimal and hardly unusual, assume a 15% royalty for making a rough estimate of the first year’s royalty income.

It is likely that the first day production might be 4000 mcf and the first years production might be an average of 3000 mcf/day.

3000 x 365 = 1,095,000 mcf/year x say, $5 = $5,475,000 x 15% = $821,250

First year income for each 40 acres might be $821,250 / 40

= $20,531.25/acre, MORE OR LESS [First year]

It does not matter where the well is located. What counts is how may acres are included in a given pool.

Note all of the numbers above are estimates. For example the $5 wellhead price used has been used by producers but current price is a little over $4 and there are pedictions of $7 or $8 in the near future. The spike of over $16 we had not long ago does not seem likely to return soon. [But then there is the enormous demand for energy in Indisa and China...]

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Replies to This Discussion

Bradford......they can lay pipeline pretty quick.
We originally signed in Feb 2006. Our unit well was started 4/16/09 and began selling gas 9/13/09. We got our first royalty check in April 2010.
We have 60 acres in Clay Twp and hope to avoid mistakes we made back here. Also, having been through this, we hope we can contribute to this group.
Outback, Royalty Question.
Question? I have heard from people on this page that $7-10.00 per acre per month with 15% royalty. However $114.93 per acre per month
is $3.83 per day . Sounds lower than the $10.00 per day per acre. Perhaps $3-4 .00 is more accurate.

Sharon
Our family is involved with 3 units. Evanchick 2H/Chancellor1H, Otten 1H & 2H, & John Barrett 1H & 2H. We have a 12.5% royality rate. These 6 wells paid the following monthly rates per acre. June 2010 gas(paid 8/20/10) $68.18/acre/month. May 2010 gas $74.02/acre/month.April 2010 gas $69.91/acre/month. March 2010 gas $76.32/acre/month. February 2010 $95.43/acre/month.January 2010 $111.53/acre/month.
You can do the math to calculate 15%.
A review of the DEP's web page will reveal that as of 6/30/10 these are wells are some of the highest producing wells ,currently, in Bradford County.
Hope this is helpful.
Thank you outback, your information is helpful in understanding price per acre per month. Thanks for getting back so quickly.
I have heard the John Barrettt wells are producing 12.2 . and some of the others are around 5. I am sure prices will be going up.
Thanks
James Barrett wells are producing 12.2 .John Barrett wells are 1H-2.67/day & 2H-4.38 per day at latest report

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