ROBERT H.DIXON JR.'s Page

I think it is believable. Leasing today is not what it was even one year ago. Companies moved in and were able to get land on the cheap. Live and learn.

It was 250 an acre paid upfront on a five year lease. Chesapeak is trying to get into Elizabeth twp and will only do horizontals. I have not signed yet, the problem as I see it, they want as close to the 640 number as they can get and I have 55, it could take a long time or never to accomplish. The royality rate was flexable, most likely in the 14-15 range. I would give my land for free if someone would do a deep verticle or two within a year or two. Good luck

Post a discussion on your concerns an we'll see if we can get multiple heads going on this.

Good luck to you Bob -- and that stuff about the royalty -- that number is calculated monthly based on the well production and your contract. It doesn't have to be within any parameters.

Hi again. I'm not in the landman business, nor am I a lawyer, but sources from various companies tell me the going right now is more in the neighborhood of $200 per acre, depending on where you are. Northeast PA is rather hot right now, so that may be the $200 mark. If you are elsewhere, it could be a little lower, but I wouldn't think as low as $50. Consider who your neighbors are leased with -- the more acreage a company has in one spot, the more likely they are to drill a well(s).

If its a horizontal well, and your under contract, there is less need to worry about another well draining your property -- the company will compensate/pay royalty to any landowner under who's land the well runs. In Pennsylvania, horizontal wells almost always run underneath more than one property. If you do not sign a lease, there is always a possiblity, although smaller in the case of horizontal wells, that some gas could be captured from under your property. That is legal in Pennsylvania if the well does not cross under your property or damage it in any way.

Most of the attorneys I am familiar with are in the southwestern section of the state. Samuel Douglass is with Rothman Gordon in Pittsburgh; Harry Klodowski is with Betts, Hull & Klodowski in Wexfor PA; and Don Saxton is in Canonsburg PA. All are familiar with oil and gas law.

Hi Robert. I am a landowner as well as an industry professional. My gut is that the 14 percent is pretty good. The PA minimum is 12, but my experience says few are accepting that right now. You may want to try getting the per acre bonus number up from 50 -- that's a little low, but don't let it be a deal breaker. The real gains for landowners are the royalties. If the company your working with wants to unitize you, strongly consider it -- most times in the Marcellus, if its a horizontal well, the driller will want to place multiple wells on a pad. At first glace this may make it seem that your royalty percentage goes down, but what it may actually do is spread your risk more conservatively. Instead of a larger percentage in one well, you'll get a smaller one in multiple wells, which gives you a better chance of a well coming in strong for you. Make sure you use an attorney who understands that concept -- just be sure you're comfortable with the unit map before you agree. Good luck.