Replies to This Discussion

Permalink Reply by Theodore Koncsol on September 20, 2009 at 8:49am

Hi. My hunting club is involved in a lease with a company. I have zero clue as to what this may be worth to me other than we signed a lease for x $. Royalties etc I have no idea what we will be paid. I am going to get a copy of this lease so that I am better informed in the very near future.

My big question is, what is a well worth once it is in? There are 24 of us in this deal. What can we expect from one well?

Permalink Reply by Theodore Koncsol on September 20, 2009 at 2:33pm

Thanks Jim. We are already signed. There are other variables that are coming into play. Our camp was founded as a not for profit and apparently we will be losing that staus.

Now, we as a group are looking to protect our assets, and things are being asked of the membership to protect it, like starting an LLC. Thus we will apparently be paid through finances of gas leases/royalties etc.

What my big concern is, will I get my money back.

Permalink Reply by Scott Wilcox on September 22, 2009 at 2:28pm

All of this is a very good reason to speak with an attorney who specializes in gas leases. They may ask you why your camp is being held as a not for profit (corporation)? Also what money are you referring to?

Permalink Reply by Theodore Koncsol on September 22, 2009 at 2:37pm

We are going to become an LLC for our resources, not the real estate. The club will maintain the land, and not the income from the resources. Dues etc. will take care of that to keep the non profit. So we must buy into the resource end of it, apparently at an appraised price. I do not know why the club can't set a price, and then we buy into it equally. So that is the money I refer to, my investment, which may be 30000.

Permalink Reply by Scott Wilcox on October 6, 2009 at 5:00pm

Your question of "Will you get your money back?' on a real estate investment can be a very complicated answer. The short answer is "most of the time". The real estate I know has seen BIG changes in the last 2 years.(Especially land with subsurface rights! ) If you own large acreage in this play area your investment should be good. Many times the members of a large group will buy you out when you are ready. At the same time selling real estate is not like signing the back of a Savings Bond. It is just not that liquid. It takes time to market the property.

Permalink Reply by Theodore Koncsol on October 30, 2009 at 4:45pm

Scott, thanks for the info. We are not selling by no means. What I mean by a return is, is having this well drilled going to be a bust or a good thing for our group.

I would be perfectly happy if they did not drill. But since they are going to in the next year, what kind of revenue stream is his going to be.

Apparently this area is having a 97% success rate at striking.
We have 540 acres of which up to 300 will be in the the first field. I have used calculators to guesstimate and it seems to good to be true.

Our attorney also said something about oil and the Trenton Black river that is apparently under us.

He stated our property is desirable as we have a gas line right of way that was put in just this year also, which we received 20 dollars a foot for, and we are within a mile of the main gas pipeline through there.

Also they are talking 6 wells on the pad.

Permalink Reply by Daniel George on September 24, 2009 at 10:53pm

We have property on the Barnett shale and we receive royalties at 23% . From our experience you can get at least $100 dollars per acre per month or more. We are in a 240 acre pool with 2 wells are wells are considered good but not outstanding for the Barnett shale. The Marcellus shale has been compared to the Barnett. Your wells may be better or worse than ours you won't know till they are in production. It is important if you can to get more than the minimum 12.5 % if you want to see income in the future. If you are in Tioga county i would like to know what percentage you signed for. I have non leased property in shippen township and i would like to know what to ask for.

Thank you

Permalink Reply by Theodore Koncsol on January 21, 2010 at 12:57pm

We just signed a standard lease at 12. They are working off our original lease that they kept bumping the lease fees, started at 20 acre way back when, and we received a one time 350 per for 3 years.

I think they may bump the royalty rate, and I have been pushing our guys at the front of this to at least ask if we can get a roylaty increase.

Permalink Reply by Lynn Wigglesworth on January 22, 2010 at 8:26am

12.5% is the state minimum. Even East routinely offers 15%. Once you've signed, they won't increase the royalty rate; you are locked in for the period of the lease. Did you have someone negotiating for you or just let the O&G Company renew the lease? You could do a whole lot better.

Permalink Reply by William Ladd on January 22, 2010 at 11:40am

We received a letter from an East Resources representative yesterday wanting to talk about leasing our acreage.

My question is, has Dominion made some kind or deal with East resources to suspend their leases with landowners made decades ago?

I understand a year or so ago there was some kind of talk the Dominion might allow Marcellus drillers to penetrate the normal level of their (Dominion) storage well operations.

Thank you for any Information you might be able to give me.

Bill Ladd

Permalink Reply by Michael Karpiak on January 30, 2010 at 7:28pm

Have you heard or try to contact Seneca Resources?

Permalink Reply by William Ladd on February 1, 2010 at 6:59am

We have heard nothing from Seneca resources. We are located only a mile or so from Sabinsville pumping station as the crow flies. There has been a huge amount of activity at this pumping station, expansion wise, within the last year. Also I know of at least three wells that have been drilled within a half mile of the pumping station.

The east representitive has told us that they can drill on Dominion leased land as long as they do not enter Dominion's storage field. We were also told that our acreage is not within that storage field.

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