Replies to This Discussion

LandownerPermalink Reply by locke on August 30, 2010 at 2:58am

Thanks for the info! Did talk to an attorney last night and he thought highest leasing prices were really to be found in the northern part of the county as of late. ( above 1200 per acre)

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Permalink Reply by Sam Douglass on July 18, 2011 at 2:41pm

For the Barnett in Texas [and the Barnett is not as good as Marcellus and other local shales] as well as in parts of PA, a lot more is paid to landowners.  This is the first wave.  They will be back later at a higher price to sign up more and then ....

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Permalink Reply by roger valente on August 31, 2010 at 9:43am

My son in law was approached by Range. He lives in Hanover Twp. 2.5 acres at $500 per acre and 14% royalty. He consulted with an attorney who felt that was way low numbers on both ends. Atty said he has heard as much as $5000 per acre and 20% royalty, not necessarily in this area, but as a top amount paid out. Also the lease had some very strange and ambiguous language in it. My son-in law won't accept there bid and will counter with much higher amounts, if not, he will wait.

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LandownerPermalink Reply by locke on September 1, 2010 at 2:35pm

Good to hear Roger. I am waiting and sitting out these offers as well with 40 acres in Hanover Twp. No reason to rush and besides with the rates being so low there is no reason to disturb the property at this point.

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Permalink Reply by Sam Douglass on July 18, 2011 at 2:46pm

Numbers recited can be described as "optimum" but some have negotiated for more - usually where the drilling is going strong and their are pipes, plants and infrastructure to handle the output.  It may be a while before adequate infrastructure is everywhere.   There is a rush to sign people up while leases can still be obtained cheaply.

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Permalink Reply by Sam Douglass on September 2, 2010 at 2:01pm

There are literally millions of acres to choose from. If you were a producer, where would you drill first. The Marcellus thins as it goes west into Beaver County and on to Ohio. In addition to lack of infrastructure, maybe that is why things are slower there. But you might want to speculate that geology has demonstrated that the shales just above and just below the Marcellus may show at least as much promise.
On the question of when they will aggressively drill in a particular area - In some areas they are just picking up reserves for the future - 10, 20, 30 years from how. I have suggested the possibility of a minimum royalty clause so the lessor can get something in the meantime. I throw out the following for consideration:

Assume a well holding 80 acres with 5,000,000 m.c.f. reserve and

gas price of $5 = 25,000,000 m.c.f.

with 15% royalty = $750,000 to lessor

over say 20 years average of $37,500/year

minimum royalty at say ½ of $37,500 or $18,750

Rounded down to $18,000/year

Minimum royalty of say $18,000/year beginning 5th ? ? year for each 80 acres leased

$18,000 X leased acres/80 = Minimum Royalty per year

Minimum Royalty in any year being $18,000 less Royalty actually received that year; Minimum Royalty paid to be a credit against Royalty due in future years in excess of the Minimum for that year.
[done on a monthly basis of $1,500/month since royalties paid monthly]

Continuing until

[a] the sum of all royalties and minimum royalties paid =

$750,000 X leased acreage / 80 or

[b] lease is surrendered.

What would your numbers be?

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Permalink Reply by Bernadette Trillow on February 8, 2011 at 4:56am

Does anyone know what Range Resources is offering in Beaver County?  I know they applied for a permit in Independence Twp right next to the Hanover Twp line.

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LandownerPermalink Reply by Jason on February 8, 2011 at 9:06am

Bill I heard one of your representatives speak last Thursday in Hookstown, PA. Very informative, upfront, and easy to understand. Your group is what is needed to ensure the best price for property owners. I'll be faxing my agreeement before Friday's Mt Jackson's deadline.

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Permalink Reply by Sam Douglass on February 8, 2011 at 12:09pm

Landmen come in waves from time to time.

Each time they come they pay more as the time for real production nears

The terms are not bad, but they are not great

Optimum is Bonus of $5000/acre [$1000/acre per year] and 20% royalty with minimum deductions

Check Barnett shale on the Internet and find out what Texans pay Texans; theyare sad because typical royalty offers went down from 25% to 20%

Barnett is not as valuable as Marcellus if only because the transportation cost from Texas to the Northeast markets is not incurred

And Appalachia offers, depending upon what you put in your lease, not only Marcellus but also the Utica, the Upper Devonian [Ohio] shale and, believe it or not recovery from the Onandaga limestone by horizontal drilling and fracking.

Go figure.  As long as the Appalachian folks accept less, that is what they get.

 

On the other hand, maybe there is 100 years of drilling  in all these shales in Appalachia.  Can you wait a while.  How soon will they actually drill in your area?

 

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LandownerPermalink Reply by locke on February 9, 2011 at 4:57pm

Are there any land owner groups in Hanover township yet ?

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LandownerPermalink Reply by Jason on February 10, 2011 at 3:43am

Marcellus Shale Leasing
On Tuesday, February 15 at 6:30 pm in the Western Beaver High School Auditorium, a meeting is scheduled to discuss oil and gas leasing in the area.
Greene and Hanover Township landowner's or anyone you can think of are invited to attend to learn more about what leasing is and what it means to every landowner in our area.
It does not matter if you own 1 acre or 100 acres, this involves all landowners.
Bill Smith is the contact person. Phone or Email
Mt. Jackson Landowners Group (MtJackson@co-exprise.com)
Co-eXprise Marketplace 724-933-1180
Paper work for Leasing sign up has been move to February 18, 2011(it was February 11)
Tuesday February 15th, 2011

Western Beaver High School Auditorium
216 Engle Rd
Industry, PA 15052

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LandownerPermalink Reply by locke on April 17, 2011 at 1:28pm

Any 411 on Southern Beaver County leasing, land group information ?

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