I'm in Jefferson Township, Butler Country, PA, and own 18 acres, and I just got offered $1000/acre + 15% royalty from XTO.    That seems lowball compared to prior offer of $3200/acre from PennEnergy.   We had requested a no surface disturbance clause which would have dropped price to $1800/acre.   The local landman couldn't approve a no surface disturbance clause for 18 acres, so it got sent to the main office - now the landman no longer answers our emails/calls.    We talked to XTO landman about no-surface-disturbance at $1000/acre, and he seemed to think it was possible.   We are tempted, but also a little frustrated at the low bonus.   I am curious if anyone else had seen lease bonus drop to lower level.  There are 2 active wells by XTO within 2 miles, and a compressor station on neighbors farm.

Dave

Tags: bonus, butler, lease, pennenergy, xto

Views: 2146

Replies to This Discussion

Are you working with Darrell? Unfortunately, that is what they are currently offering. I think what has happened is they have installed most of the infrastucture to transport the gas and are currently drilling all over the area, they basically have created a monopoly and can dictate their terms. Even large farms that were not previously leased are only being offered the $1,000 / 15%.

As recently as last spring, we got $3,000 ac and 17% from them for small parcels. At the time, that was down from what they had been offering but they had most of the land around us. Our parcels were small so really not much room to negotiate. I believe that their offers dropped to $2,000 in June and late fall to $1,000 now that they seem to have control of the area. 

I have sent you a friends request with a little info you might be interested in.

 

Thanks - appreciate the help.

Dave

I'm sorry, we had gotten $3200 an acre and 17%. Had a brain fart.

I'm also in Jefferson Township and we recently signed a XTO lease for $1000 + 15% for 6 acres.

 

It's become the new standard that the smaller land owners are all being offered.  According to what we were told, most of the larger land owners have been signed and XTO is now in the process of adding acreage to planned units.  

 

Once the majority of the larger owners are signed and the well locations planned, consistent offers are made to all of the other owners in the potential unit. 

All the large owners around us were signed and they came back much later (after the well was drilled) and offered what they did to the rest of us with the majority of landowners being just over 1 acre. The original landowners got basically nothing as their leases were signed 6 years ago when there were no large bonuses or royalty percentages.

A little more info to consider. I just happened upon a new twist in that XTO has filed to change the status of the well near my location to "Inactive Status". It was drilled in late 2011, fracked in May of 2012, pipelines installed in the fall of 2012, Dec 2012 filed for a change to "Inactive Status". From what I gather, this will allow them to shut it down for up to 5 years. Just something else to consider when you accept a $1,000 per acre bonus, there may not be any royalties. If they did this at one well, I can forsee them doing it at others once they get the land locked in.  

There is wording in the standard XTO lease covering this possibility so be sure to read it carefully. They can and have changed the dollar amount for the well not producing.

Thanks for the continued updates on XTO activity in the area.

Dave

Where exactly is this well located?  I live just off O'Hara Rd in Jefferson Twp and I know myself and neighbors have not been leased.

"It's become the new standard that the smaller land owners are all being offered.  According to what we were told, most of the larger land owners have been signed and XTO is now in the process of adding acreage to planned units. "

 I'm having trouble understanding this.

In the XTO unit we're in, or will be when it gets recorded, there are maybe 15-20 landowners.  With only one exception, every landowner has a horizontal bore going under their property.  In other words they are unitizing those pieces that they need for drilling, and no others (with one exception).  So, it seems, they would be willing to pay top dollar for anyone they need to bore under, and pay nothing to someone that isn't over a bore.  I can't see any incentive to add small pieces to the unit, considering that every new lease requires legal work and bookkeeping paperwork.  What am I missing?

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