Leases Offered in Noble County

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!

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Replies to This Discussion

Permalink Reply by Finnbear on August 14, 2011 at 10:19pm
They way it reads, the $2600 is delay rental for the 5 year primary term. Calling it a sign on bonus is not official lease language, but designating it as a delay rental payment is.
Permalink Reply by Christiane Marshall on August 12, 2011 at 6:38am

Wow, this discussion has been really helpful. I appreciate everyone's willingness to share information here! I have questions that may show my ignorance! Okay:

  1. There's a sign on bonus that is paid once?
  2. Is that paid when we sign the contract?
  3. In order to get royalties, do they have to drill on your property? 
  4. If so, if our property is landlocked with only a difficult access, does that mean they won't be interested in our acreage?
Thanks in advance! :  )
Permalink Reply by Robert Fulton on August 12, 2011 at 6:46am
Scott or Nelson? looks likea good one for you guys.
Permalink Reply by Jon Henderson on August 12, 2011 at 8:25am

Since they haven't answered yet I'll take a shot.

1. The sign on bonus is paid within 90 days(supposed to be) of you signing the contract with the O&G company or leasing agent.

2. Leases are usually renewed every 3 to 5 years. Sometimes 10 years, depends on contract.

3. You will be paid royalties if a well is drilled in the "unit" that contains some or all of your property. This unit is usually 640 acres to 1000 acres total. You get a % based on the amount of acreage you have in the unit.

4. Your property is still probably desirable. "Landlocked" is a broad term. Why is it landlocked in your opinion?

 

Hope that helps.

Permalink Reply by Robert Fulton on August 12, 2011 at 9:54am
I tend to agree with that. It is likely your neighbors have signed? or will sign with some company , the horizontal boreing may in fact rely on your property to achieve their desired direction. It seems as though they are buying up all the lease property they can to drill as efficiently as they can.
Permalink Reply by Private KeepOut on August 12, 2011 at 10:54am
Robert,  I was told that no matter where they drill....they have to drill at a 30 degree angle due north. I have seen the plat (sp) of our area and all who surround our property on the north, west and southern end have signed leases with FCEC......I'm talking fairly large parcels. If our calculations are correct....that means that my 13 acres and the other six acres that my two closest neighbors have are right in line of that angle. It's going to be quite interesting to see how this all plays out.
Permalink Reply by Robert Fulton on August 12, 2011 at 11:06am
I am just being (or trying to be ) funny. lol More alpacas in the future?
Permalink Reply by Private KeepOut on August 12, 2011 at 4:38pm
lol.....nope...no more alpaca, I'm going into the meat goat business instead.
Permalink Reply by Finnbear on August 13, 2011 at 12:32am
Is there a decent market for them in your area?
Permalink Reply by Private KeepOut on August 13, 2011 at 5:32am
The market is in Columbus.....huge Somalian population....as a matter of fact the largest in the country. I have a friend down toward Cincy who caters to them and can't keep enough goat.
Permalink Reply by Mark Curry on August 12, 2011 at 11:11am
We heard there will be drilling, tests I suppose, south of 285, and near robins ridge gc.
Permalink Reply by Steven Gardner on August 15, 2011 at 9:13pm

TP.. your close to correct .. all the permits I've seen in Ohio for Horz Utica wells, the bores go   N30°W .. which is the same as  S30°E .. so along this line depending where the drilling pad is located (middle or one of the ends) and I've been told that is due to them wanting to cross the shale formation at a 90° angle.

I've attached a typical map permit and this also speaks to the dilution of royalties .. and this is only a 225 acre drilling unit..

 

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