siting/spud fee drill pad

Does anyone have any info on how much a siting/spud fee should be? Is this the same as a drill pad payment? I'd appreciate any help with this.

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Permalink Reply by Finnbear on December 16, 2011 at 2:10pm

They are the same thing. The amount is determined by what you agreed to in your lease. There is no standard amount - the amount is determined by land prices in the area of the lease and how little the oil and gas company can get away with paying you for it.

Permalink Reply by jett on December 17, 2011 at 7:16am

Is there a "going rate" in our area?  I've heard 25,000 and 50,000 and even up to 100,000 being tossed around. These are some wide ranges.

Permalink Reply by Craig Stull on December 17, 2011 at 7:48am

Jett, Same people that signed for 5800/20 (alov lease) spud fee is 15,000!!!

Permalink Reply by jett on December 17, 2011 at 11:10am

Thanks everyone!

2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on December 17, 2011 at 7:53am

If it's any help to you: My lease calls for 15K for a pad.  Lawrence County PA. (Shell)

Permalink Reply by Joe on December 17, 2011 at 11:00am

Most I've seen are $15,000. That's not enough! I saw one for $35,000 and I got a copy of an Ohio lease that says $60,000. For example in Center Twp Butler county, Pa. They already or soon to be enacted zoning ordinance of 1000 ft set back from inhabited dwellings and 30 acre parcel subdivided for conditional use witch means If you have 100 acres you'll be subdividing 30 acres right in the middle that you can't do anything with except farm. That's a big chunk of land to loose any development rights on. Now go look at how much is tore up for a drill pad. All the trees cleared right in the middle of your property. Now is $15,000 enough??

Permalink Reply by jett on December 17, 2011 at 11:11am

I'm a little confused - do you mean that the 30 acre parcel is for your home, barns, etc. or they're only allowed to use 30 acres for their drilling pad? Conditional use for you the farmer or them the gas company? And what are the conditions for the conditional use?

 Don't they have to compensate you for your destroyed timber or is that covered under the spud fee? Can you freely let me know which companies gave the 35,000 or the 60,000? If not, I understand your caution. Thanks!

Permalink Reply by Joe on December 18, 2011 at 5:05am

The 30 acres is for the well. I was told you can farm it but not build on it. The $60,000 pad fee I found here on this site. I think it was one of the Ohio land owners groups. I"ll include a copy. It's a very interesting lease compared to the others I looked at. I'd be interested to find out if they were successful with it.

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Permalink Reply by jett on December 18, 2011 at 11:29am

Thank you.  I looked the lease up and I agree that it would interesting to know if this went anywhere.

Permalink Reply by James Kerns on December 19, 2011 at 1:16pm

Jeanette, I hope by this post you have done your homework and are ready to sign the lease you feel comfortable with and cash a big fat check, while looking forward to your royalty's later.

 But I will ad this. It is your land. You set the price you will accept. I just want to emphasize to all again. We are the landowners, we have what they want. We should set the price and contract terms. It is not "what are they giving today", people. When you go to the car lot to put your hard earned dollars down on a car, does the sales manager come to you and say " Mr. or Mrs. so and so, what will you give me today for this fine 2012 finely crafted American auto".

 No they say, "here is the sticker price and here is the financing agreement and sales contract for you to sign". Now you are in the driver seat. If more of us would adopt this attitude, the landscape might look a little brighter for all of us. 

Also please remember, a drilling pad is going to tie up that real estate for a long, long time. What about future plans for that land, future development prices when you are gone and your kids must decide what to to with the farm or land.

Again i bid Good Luck to all. 

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