Replies to This Discussion

Permalink Reply by Dave on October 17, 2011 at 11:32am

Most of the leases that I have reviewed have a (one time) extension provision for an additional 3 years at the same lease bonus payment (assuming that drilling and production have not commenced).

Almost all 5 year paid up leases can be held by production indefinitely assuming the drilling company is producing in paying quantities.

If the drilling company has not commenced "operations" during the 5 year lease period and does not extend the lease an additional 3 years,  then the lease is terminated and the owner can then market the lease as they see fit.

Hope that answers your question.

 

Permalink Reply by Finnbear on October 17, 2011 at 12:14pm

Most of the leases I've seen being offered in SE OH have either a 3 year or a 5 year renewal available to the lessee should they decide to keep the lease past the initial 5 year term. There is usually a set price for the renewal spelled out in the lease or addendum sheet. If you use a good attorney, he can probably add a "first right of refusal" clause which allows you to shop around for a better deal toward the end of the primary term. If you find a deal you like better than your current one, you can present that better deal to the original lessee and they have the option to renew at those new terms or let you out of their lease si you can pursue the new deal.

Permalink Reply by Janice Lanphere Hancharick on October 17, 2011 at 12:56pm

Information like this is NOT TO BE SHARED, as much as everyone would like to know it.  People who don't commit to a Group effort as it progresses and educates its members, are only thinking $$$  and % ... and isn't that what you're asking for?  It's easy to ride in on the coattails of others hard work and committment, but how many would own up to it?  Companies seriously wanting AC won't put all their cards on the table if they don't know the size of the AC package, and many rights owners don't want to commit their AC until the whole story is written.  Doesn't that sound like a catch-22?  Agreeing to join a Group means one understands the concept that strength in negotiating for favorable clauses, benefits, addendums, $$$ and %  COMES from EXISTING #'s of members and AC ... not "what might be".

A Group contract is a Letter of Intent that  rights holders sign committing their AC to the Group.  It is NOT a lease.  Group representatives then have the authority to put the AC up for bid with the Group's agreed upon priorities.  As bids come in, no company should know what others are bidding.  If they did how or why would anything go up?  Let them guess.  Let Mobil or Chevron or Hilcorp or Chesapeake guess at how much the other is willing to pay.  A blind auction benefits a Group, and Group reps know it.  Given a time frame the cream will rise to the top pretty quickly!   Time is on the side of the Group members because this Marcellus/Utica play is not going away any time soon.

I believe these may be the tactics Smith-Goshen is using.  Many other Groups have successfully gone this route or are in the process in PA , on the OH-PA border, the PA-NY border ... if not doing it on their own then using the services of experienced professionals who have refined these tactics and a few more.  Too many landowners either "sit on the fence" or believe the first friendly landman who comes along, but neither of those routes are for the committed Group members.

Permalink Reply by Janice Lanphere Hancharick on November 2, 2011 at 9:29am

Whatever bidding is going on, if that's the way S-G is running this, it is not to the Group's advantage to have the numbers put out on line.  It's hard to be patient.

Permalink Reply by Finnbear on November 2, 2011 at 3:51pm

twitch,

Are you participating in the Smith-Goshen group? Do you have land in Belmont County?

Permalink Reply by Belmontlandowner on November 3, 2011 at 5:50am

My family owns 75 acres in Smith Township. How do we go about joining the Smith-Goshen Group? I can't find any contact information for anyone. Please advise

Permalink Reply by Finnbear on November 3, 2011 at 6:29am

Contact info sent. Check your friend requests.

Permalink Reply by Belmontlandowner on November 4, 2011 at 4:44am

I hate to ask but can you send that info again. I don't know what I did but I clicked on something and the message was gone and I have no idea how to retrieve it again. Thanks.

 

Permalink Reply by Finnbear on November 4, 2011 at 5:19am

Sent to your Inbox here on gomarcellusshale.com

 

Permalink Reply by SA Frank on November 8, 2011 at 3:20am

I was curious if anyone was able to attend the meeting last night and if there was any kind of timeline provided for bringing offers to fruition.  Any update would be appreciated as I was unable to attend.

Permalink Reply by Belmontlandowner on November 8, 2011 at 3:27am

I wasn't aware that there was a meeting last night. Wish I had known.

Permalink Reply by SA Frank on November 8, 2011 at 3:44am

There is another meeting on November 15 - 7:00 pm at the Union Local middle school.  Wesbanco will be speaking, but I am sure that there will be an update on progress as well.  I can't make the one's through the week.

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