Replies to This Discussion

Permalink Reply by Willy on September 11, 2011 at 9:02am

Thanks Randy, I see your name all over the forum and it seems like you are very well versed.  I have a question that maybe you would know the answer.  When everyone is signing their mineral rights over to the gas companies are you giving up all rights or just just O/G to a certain point?  I am trying to figure out why the lease that Bonnie sent states all o/g on the property vs. a sample lease from ALOV.us that states"surface to the top of the Queenston Shale".  According to Geology.com the queenston shale is above the utica formation and I assumed would not be included in the lease terms.  Are the landowners allowed to bargain again for the Utican Shale for future drilling if the lease is correctly written?

Permalink Reply by Shower Bath on September 11, 2011 at 10:41am

Willy, Most of the better sample leases that I have seen are reserving all of the shallow rights (above the Queenstown Shale) for the lessor (landowner). This allows the landowner to later lease the shallower formations for more money. And it prevents the O&G company from comming in and drilling a shallow well to lock up your lease as held by production. Also, most good leases will have a limit of 100/200 ft below the depth of production, so if they drill the Utica that would reserve the deeper formations for you to lease later. Along with these issues a good lease will have both vertical and horizontal Pugh clauses. The sample leases on the ALOV website are pretty good to measure other proposed leases against. Here's my disclaimer, I'm just a landowner not an attorney or landman and my only advice is to educate yourself. Best.....     http://alov.us/

 

Randy

 

Permalink Reply by Finnbear on September 11, 2011 at 6:24pm

Willy,

Here is my take on the 4 groups you mention.

1) NALS/Wishgard - as with earlier Wishgard deals, the offer seems to change every time you talk to them - getting a consistent answer is kind of like trying to nail Jello to a wall. NALS will be receiving compensation for their work. Wishgard will also take a cut when they flip the lease to whatever producer decides to buy their group of leases. Two middlemen taking a  $ cut between me and the oil and gas company is TWO too many for me. Each middleman is likely to take a couple hundred per acre and a %  of the royalty over and above what the landowner gets. Wishgard got $160/acre and a 1% royalty interest on a bunch of leases from earlier this year and the landowners got $1840/acre signing bonus and about 15% royalty. Those leases were through Wishgard and had Tri-Star Energy Holdings named as the lessee. The story was that Tri-Star was pooling those leases for Gulfport Energy. In that case, I think Tri-Star would expect to be paid for their work and would also take a cut of the action.

2) Smith-Goshen is a landowner, non-profit group that is doing great things in Smith, Goshen, and the surrounding townships. Click on the link to see how one works. Larry Cain is the contact and I can give you a phone# if you'd like to speak to him. My land is in Washington twp and I am participating in this group and you may contact me off-list if you'd like to know more.

3) The Williams/KWGD group sent their acreage out for bid a week or so ago. I believe group 5 is closed so you probably can't get in on that one.

4) The Rokisky group signed leases a while back and I believe is also closed unless they have very recently started another round

There was another attorney-led group in the northern part of the county and in Jefferson county that last week got a good offer (said to be $4250/18.75% and rumored to be even better) and has a signing this week. The window to participate is probably closed on that one too. It sounds like a pretty good offer but I have not seen or read the lease and addendums to verify. I'd appreciate a copy if anyone has it.

Finnbear

Permalink Reply by Willy on September 12, 2011 at 2:31am

Thanks everyone for extra information.  This forum has a lot of good information and some of you keep giving.  I have a lot of catching up to do.  Thanks again!!

Permalink Reply by time will tell on September 15, 2011 at 4:07pm

does anyone know who can we contact in belmont co to join with a land group . Does anyone know about the meetings in whelling today and tomorrow that Exxon are holding a the mariott on elm grove .

Permalink Reply by Finnbear on September 15, 2011 at 4:54pm

Where in Belmont County (what township)?

Permalink Reply by time will tell on September 16, 2011 at 1:10am

somerton is the town  in somerset twp.

Permalink Reply by Finnbear on September 18, 2011 at 8:07am

Have you talked to the Smith-Goshen group? I'm not sure if they go as far south and west as that but it is worth asking.

Permalink Reply by time will tell on September 18, 2011 at 9:12am

I emailed them . thanks finnbear

Permalink Reply by Willy on September 16, 2011 at 3:32pm

Has anyone had a chance to review one of the previous 4 Williams/KWGD group lease offers?  I am curious what they have been offered in the past.  There is not much information that I have been able to find regarding any of Williams groups .  Is most of his activity in a different county or are they just not allowed to talk about it?

Permalink Reply by Janice Lanphere Hancharick on September 19, 2011 at 1:01pm

The total message that seems to be coming out of Belmont County is that folks are getting the same "company landman" treatment that PA rights owners received a few years ago (& a few now ), also those being approached for seismic testing and right-of-way leasing are not receiving fair offers.  This is not the type of treatment they deserve!  Why are there multiple groups in one county when one large group could maximize the $$$ and royalty %'s, plus extra benefits and protections?  If you stay fragmented  ... ever hear the old sying about "shooting yourself in the foot"?  No company needs your OGM's tomorrow, and it won't be the last time you'll be approached. Let them deal with a group that has marketing and negotiating strength.

National news reported 2 wks. ago Marcellus recoverable gas was under-estimated 4,100% ... quite an error!  Now Utica in OH is being chased after not for the gas, but the oil and condensates.  Why?  Not because gas is a cheap commodity but because the new seismic technology  has shown enough oil & condensates exist in OH to line the big companies wallets for quite a while at great prices ... great prices for them.  Stick together and market yourselves as a major entity.  When natural gas prices climb, those same companies will return for it, and still be drilling the wet stuff.  They aren't crazy.  These companies are using 2D, 3D, and 4D seismic technology in addition to satellite and airplane reconnaissance to make sure they know what you have.  Do you

know what you have?  Becoming a band of brothers will keep you from feeling like the mouse who found himself in bed with a tiger. 

Try leveling the playing field, and think like professionals on their way to earning their Doctorate degrees.

J. L. Hancharick

E-mail: jlhanch@nc.rr.com

Permalink Reply by billmac on September 20, 2011 at 7:32am

I agree 100% Janice,   these people are going about this all wrong if they want to get the most out of their land. There are to many diff companies making these off the wall offers without knowing who has what and where and which company made offers to that individual.  As far as us being landowners, I think we need to be organized (as a "landowner group") and have a spokesperson represent us so we can collectively make educated and wise decisions for our benefit, not theirs. There is plenty of time, but seems alot of people are signing in fear of loosing what they think is a good offer. Time is on our side. They cannot do a thing with our signed permission, and that gas/oil isnt going to disappear. Those offers can only increase if we stick together. There is alot more to this than meets the eye. These gas/oil companies arent wealthy because they are dumb.

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