Replies to This Discussion

Permalink Reply by Gary Cunagin on May 30, 2011 at 9:27pm

I'm in Windsor Twp.  had an offer of $100 an acre/15%.  He increased offer to $200.  Haven't done anything yet.  Maybe we are ready for a Morgan co. group.

Permalink Reply by William Kern on May 31, 2011 at 4:43pm

I have received two lease offers  from Artex for $25/acre - the second one had a signing bonus - we refused both because we feel the mineral rights are worth much more.  Also, I have an appointment to contact a lawyer who has much experience in oil/gas leases - he assisted the Harrison County Land Owners in their negotiations with Chesapeake - I hope to employ a similar strategy by forming a Morgan County Land Owners group where by pooling our land we can be in a similar position of  strength in dealing with the energy companies.  I would urge anyone in Morgan county NOT to sign any lease agreement - you will do much better by waiting until a group is formed and advised by competent legal help - If you are interested in forming and or joining a group you may  contact me at [email protected]

Permalink Reply by Joe Robb on May 31, 2011 at 6:41pm

Yes I think we need to get a group going, i have 175 acres.

Permalink Reply by William Kern on June 1, 2011 at 8:22am

Yes! we definitely need to form a group - I am scheduled to meet with Dick Emens, the lawyer who has been involved with the other land owner groups on June 7th in Columbus.  I am sure this will be discussed.  My problem in forming a Morgan county group is that I live in Columbus and don't know anyone there.  If you know people there especially someone who is capable of starting or helping get one started it would enable us to move quickly to be ready when the time comes - I would be happy to be involved also-I will relay the results of my meeting with Mr. Emens -let's keep in touch - Bill Kern

Permalink Reply by Gary Cunagin on June 1, 2011 at 8:59pm

Bill, I'm even further away, Tipp City, OH and I only have 44 acres. I only know a few of my neighborers and some have already signed.  I'll working on getting a Morgan county page on gomarcellus for now.  I'm looking forward to hearing what you learn on June 7.  Gary C.

Permalink Reply by PA Joe on June 2, 2011 at 3:13pm

Guys be careful. We got burned in Western PA by forming a group. About 4 years ago we had the opportunity to particpate in a landowner group organized by one of the attorneys. I won't mention the name of our guy because I think he actually meant well and because I heard of someone being sued by their landowner attorney for slander after poo pooing them on a board like this (not sure if thats true or not). Long story short we went with the landowner group and got a really good price for our 62 acres. Our neighbor went with a company by themselves and while we got a nice check (after 6 months) they only got 400/acre up front but had a well drilled after just under two years and have been getting 100grand /month in royalties for two plus years! We still have no word on when if we will ever get a well drilled. The landowner groups (and the attorny's representing them) do a good job bidding up the cost per acre. So good that the only people that can afford to take a lease from you are super giant corporations that have hundreds of thousands, if not millions of acres so our 62 acres doesn't even come up on their radar (they have over 600k). Also, the lawyers wind up getting paid by the gas company when they "deliver you up" as a group. Either in the form of a bonus paid to them by the companies for every acre they deliver or as some % of what you get on a dollar per acre basis. You will make your real $$$ by getting wells drilled not by an up front lease payment. Works like this (we learned the hard way): gas is sold in $ per thousand cubic feet and the Marcellus wells in our area are coming on at about 4-5 million cubic feet per day. Gas sells at around $4-$5 per thousand cubic feet. So 5000 thousand cubic feet per day (x) $5 = $25,000/day of which we would get (if they ever drill) 15%. Works out to over $100,000 per month. Lawyers dont get a share of this so they dont care if you ever get a well drilled it's all about the up front for them then they move on. If we had it to do over we would have went with the smaller company in our area that was paying less up front but who only had 10,000 acres so our 62 would have been more of a priority fro them to drill on. I am 57 and would be retired by now if I had did what my neighboor had. Good luck guys and this stuff isn't as complicated as it seems. If you can find someone local to represent you (if that's what ya wind up doing) he/she will probably know just as much as any outsider. All the lawyers do is serve as glorified contract writers in my opinion. Sorry if I sound bitter I want a dang well!

Permalink Reply by William Kern on June 2, 2011 at 6:16pm

Thanks for the warning- looks like the main priority is to get a well started - but the best offer I have had has been only $25-acre with a signing bonus of $100/acre - we have 1450 acres - some difficult decisions ahead!

Permalink Reply by PA Joe on June 2, 2011 at 8:37pm

I have learned that you can work into your lease a statement or something that they have to drill a well in so much time or the lease is void. Talking to some of my neighbors that did this they used 3-4 years. Dunno but it seems to work for them and with that much acreage seems like a reasonable request. Good luck bud! Where is Morgan County anyhow?

Permalink Reply by Gary Cunagin on June 2, 2011 at 7:35pm

Joe, It's great to get information from someone who has already been over the road.

Do smaller companies drill horizontal wells?  

Sure wish I knew as much about this business as I will later on.

 

Thanks.

Gary C.

Permalink Reply by PA Joe on June 2, 2011 at 8:43pm

Yes they do. My neighbor (a different one) is an engineering assistant in Pittsburgh, or northern WV I think for a medium size company. He  said look for companies that are looking to have 50-100k acres, no more or else they wont be able to ever get to your property even though they'll promise you the moon up front. These wells take a long time to drill and you need to make sure that even if they are busy they can get to your ground. Wish he had been my neighbor 4 years ago. I was feeling kind of twisted off earlier but if my experience helps you all out, maybe that's what the good man upstairs has in mind for me. Like in this picture.

 

http://www.despair.com/mis24x30prin.html

 

 

 

Permalink Reply by PA Joe on June 2, 2011 at 8:44pm

remember also, how many lawyers out there have the average joe's (no pun intended) best interest at heart.....

Permalink Reply by Rich Koehler on June 3, 2011 at 8:00pm

Emens is, umm, eminently qualified.  Look at his credentials, which include helping to write the present oil and gas law in the state, among other notable things.  He is the attorney for the Mohican Basin Landowners here in the juction of Wayne, Holmes, and Ashland counties.

 

Where is Morgan County, by the way?  I'm trying to get a handle on how things are spreading across the state.  According to DNR information, there are Utica wells that are producing gas as far west as the Sandusky area.   There is also, according to DNR records, a straight Utica well in SW Medina county and another farther south and west, I think in NW Coshocton county, but haven't looked at my map to double check that before posting here.

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