Replies to This Discussion

Permalink Reply by Robin Jackson on October 11, 2011 at 4:12pm

Hi Sprio, We have a 3bdrm, 3bath, 2.8 acre home, currently under lease, sellings rights with property. Would love to move on our larger acreage asap. I've added you as a friend so we can take this discussion off line.

 

Permalink Reply by Jay Alexander on October 20, 2011 at 5:20pm

www.paoutdoorproperties.com

 

Permalink Reply by Marc Fournier on November 3, 2011 at 8:00pm

30 acres $249k comes with 50% OGM rights and is not currently leased.  That means there is potential lease bonus on top of royalties.  http://www.realtor.com/realestateandhomes-detail/503-Burnett-Ln_Gil...

23 acres on a 7 acre lake.  4 bedroom 2 bath home with jacuzzi, dock for lake and great views. 4 car garage, storage unit, gazebo on hill. $235k no OGM but may negotiate for the right price. http://www.realtor.com/realestateandhomes-detail/Rr-1-Box-96-A2_Ler...

6 acres on same lake.  2 bedroom one bathroom converted barn to apartment.  $129k  No OGM but may negotiate for right price. http://www.realtor.com/realestateandhomes-detail/Rr-1-Rt-467_Lerays...

Both of these are available for rent too.

 

Permalink Reply by Rob Thompson on November 8, 2011 at 12:17pm

We have 120 acres, Franklindale, currently not leased....not really looking to sell, but would consider an offer if enticing enough....(dont come to me with less than 3M however :) 

 

Newer home (2005) ... 4 bedrooms, 3 bath, finished walkout basement with patio, huge deck connects to kitchen and family room overlooks barklay mountain.  30x60 pole barn, fenced 100 x 100 ring, woods, fields, pond. 2 parcels, 73 acres (with buildings) and 47 acres empty

 

Permalink Reply by spiros kasimis on November 10, 2011 at 12:17am

any income from the property?

Permalink Reply by Rob Thompson on November 10, 2011 at 7:01am

No...aside from a small dog training business. A local farmer bales about 15to acres but does not pay for that as it keeps the open land open for us. Could be some timber income on the property but we have not looked into it as the price of timber was down.

Permalink Reply by Dave on November 18, 2011 at 10:07am

I have a 44 acre farm thats in a planned production unit I would sell for the right price

Permalink Reply by Golddigger on November 30, 2011 at 4:27pm

What is the right price? Most sellers are asking more per acre than current studies show their worth. Gas at $4.00/cu.ft, and 12.5% royalties, one acre will produce an average of $25,000-$30,000 in return over a period of 20+ years with a re-frac in the 7-10 year period. Typically an investor is only willing to risk 25% of total potential on any investment over a substanial period of time. So those who think they are going to sell their land for $25,000/acre will never see it. Investors are currently paying $2,000 - $4,000/acre for the gas rights plus the value of the land depending on location, if leased, to who, and lease terms. Properties that are already in production or planned production have brought up to $10,000/acre including all OGM and surface rights. Only more if the Buyer's have commercial plans for the property or by gas companies themselves for surface useage.

Permalink Reply by Marc Fournier on December 1, 2011 at 7:58pm

The right price depends on many variables.  Gas is currently at $4/cu.ft. but will most likely go up in the next 20 years.  It is probable that the 20 year spread will be more like $6-8.  In the last 10 years we have seen prices spike to over $10/cu.ft. Royalty return is contingent upon wellhead price and volume.  Many wells in Bradford are showing returns of $200-$500 per acre per month with the price at $4.

Is the property  currently leased?  If not, there is potential lease bonus.  Most companies hold off on leasing in Q4 due to budget restrictions but typically Q1 and 2 allow for more lucrative lease bonus payments.  It is entirely possible to get much of your investment back relatively quick if a lease payment comes to fruition.

Due to the nature of horizontal drilling, you may end up with a royalty of up to 16% with no well on your property and can sell the land itself for another return.  If they put a well on your property they pay a fair price for the value of that land. Then they pay a fair price for a pipeline to get to it. 

So...what is a fair price?  It depends on the property and many variables.  The property we have for sale is 30 acres.  The lease expired before they were able to drill so we will eventually get a lease bonus.  Our property has 30 acres and is listed for $249k with 50% royalty.  We expect a lease bonus negotiation in 2012 to be between $2500 and $5k.  That gets the investor between $37k and $75k return (with 50% OMG rights).  That is 15% return on the low side and 30% on the high side. I challenge anyone to find a return at a fraction of that. 

If royalties come within a 5 years and prices stay at $4 there is another $375k in total return on the short side.

Well head prices will go up once the European and our own mess rebound.  This is the time to invest before it is too late.

Permalink Reply by Rob Thompson on December 1, 2011 at 11:21pm

Wow...good luck with that lease in 2012....I'd love to know if you get it and how much you get. Where are you at again? Our lease ran out in summer 2010.. and we are still not leased. Most we have been offered is $750/acre. We have 120to acres in Bradford County (franklin twp). We were told that they wont offer us any more than that and they will just cut us out of the units if we don't sign. Oh and they want surface rights too....cause if they get us they want to put two wells on us....and yet we aren't even worth half of what our much smaller neighbors got!

Permalink Reply by Adam Ugliuzza on January 5, 2012 at 12:32pm

Recent play in the Utica shale in Ohio has caused many of the energy companies to switch gears. Ohio laws and regulations are not as strict as Pennsylavania. There are rushing to get as many wells drilled as possible before legislation can be passed that will restrict them and cost them more money. This factor teamed with low gas price has caused a shift in interest as some areas of Bradford County have lower gas production per well than others, causing the lower producing wells to not be profitable. Once things settle down in Ohio and the price of gas increases companies will be back looking to release land in areas that have gone stagnent with gas play.  

Permalink Reply by Jonathan A Jones on November 18, 2011 at 11:30am

I live in Western PA in Butler county.  We have a house on the market now listed for $265K - 3.2 acres, 3BR, 2.5B home.   Most of the property around us has leased or is considering leasing.  I will add you as a friend if you are interested in the property.

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