Carroll County Ohio SURE Group

Just got a call from my parents, they are part of the Carroll County Ohio SURE (Standing United Really Excels) Group.  They just signed over 7000 acres for $3500.00 an acre with a 20% royalty clause!   You guys need to remember this when your dealing with the companies! That is a BUNCH of money!!!

 

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Permalink Reply by Jim Litwinowicz on June 2, 2011 at 2:40am
How long was the lease for?  What company is it with? Does it have an option to extend?  In any event, those are good numbers.
Permalink Reply by Mike h on June 2, 2011 at 3:49am

I was at the meeting they had a few weeks ago at the high school and signed up then. My information is current as of the meeting. It was an open meeting so I don't consider that I am disclosing anything that might be considered confidential.

The $3,500 an acre and 20% royalty (gross) was the going in position of the people that formed the group. That is, they weren't speaking to companies that weren't willing to meet that minimum amount. They indicated that there were 5 companies that were bidding/negotiating so the upfront bonus may actually be higher when all is said and done. They had roughly 5,500 acres committed going into the meeting and were planning on capping the group acreage at 10,000 acres (Carroll County only) so that a wider range of companies had the opportunity to make offers.

At the meeting it was indicated that it is a 5 year lease with a 3 year renewal (which means a 40% increase in the bonus money based on the timeframe).

The lease terms and conditions are based on the ALOV lease which can be found at http://www.alov.us/. I was just there and I see that the SURE form is on that site as well.

I signed up because the lease terms and conditions are pretty good in my opinion and protect the interests of the landowner much better than some of the other leases I have seen. It may be that there will be more money on the table for others down the road but my main concern is protecting our farm in addition to getting decent compensation on the lease.

One thing that was interesting about the lease is that there are both surface and vertical Pugh clauses. Rights above the Queenstown layer are reserved to the owner.

A lot of the participating acreage that was shown on the map at the meeting was along route 9 north of Carrollton (towards where the Chesapeake well is) which I'm sure makes the block attractive. We are South of Carrollton (Union Township) where a lot of people have already signed with Chesapeake so I'm not sure how it will play out for us.

Nuts says $3,500 an acre is a bunch of money but if you have a bad lease and your land gets wrecked it won't seem quite as big a bunch of money. Whatever the money one should always read the lease carefully and check with an attorney if you have any questions or doubts at all. At 26 pages (with notes) I know the ALOV lease is a bit to digest but it's a big decision one way or the other.

Mike

 

Permalink Reply by Paul Martinelli on June 4, 2011 at 4:09pm
the word on the street is that leases will exceed $5000/arce.....
Permalink Reply by Keith Mauck (Site Publisher) on June 7, 2011 at 6:22am
We are keeping track of lease offers at ShaleBiz.com. If you have one to add please do so at http://www.shalebiz.com/pages.php?page=11
Permalink Reply by Jim Walters on June 8, 2011 at 12:20am
negotiate . . . negotiate . . . .negotiate. Good for the people of Carroll County.
Permalink Reply by RAYMOND McELROY on June 9, 2011 at 4:16am

IF YOU WILL, I WOULD LIKE TO KNOW THE NAME OF THE COMPANY THAT AGREED TO THIS DOLLAR AMOUNT; I OWN LAND IN HARRISON (198 ACRES.) I HAVE NOT SIGNED UP WITH ANYONE, AS OF TODAY..

REGARDS,

RAYMOND

Permalink Reply by Mike h on June 9, 2011 at 4:56am

Word on the street is incorrect Paul. There is a lease signing today in Carrollton. There will be a second date in the not too distant future.  I'm not in a position to say which company and which price as the leaders of the SURE group and the company have not announced. Raymond, the amount I indicated in my original post can be used as a reference point. I'm sure that the actual details will come out soon but I respect confidences.

 

Mike

Permalink Reply by Paul Martinelli on June 9, 2011 at 6:27am
Mike,,,,,not this month,,,perhaps not this year,,,,,,but this came from some landmen discussing the issues.
Permalink Reply by Robert J Ellis on June 9, 2011 at 6:29am
I have a property in Trumbull County and have recently been offered significantly less than this.  I'm thinking I should be patient until drilling picks up closer to Trumbull.  Any advice would be appreciated.
Permalink Reply by kathy young on June 9, 2011 at 7:04am
I am in New York state and a group of people formed a coalition to negotiate their leases. They have recieved over $5.000 and acre with 20% royalties.
Permalink Reply by James C McDonald on June 9, 2011 at 9:33am
You need to think about this: $5,000 and 20% for 49 acres!  Are you guys giving away the farm?
Permalink Reply by Larry Jenkins on June 10, 2011 at 1:51am
I'm the President of the SURE Group and legally I can not give out any details.  We are very very happy with the amount we signed for and the amount of royalties we received.  We are very very pleased with the company that we have chosen.  What everyone is forgetting is that our first criteria to bid on our property was that we would only accept offers that agreed to the terms of our LEASE!!  If they wouldn't accept our lease then their offer was rejected. We owe a big thank you to the ALOV group for letting us use a version of their lease!!

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