Replies to This Discussion

Permalink Reply by Paul Blausey on February 2, 2012 at 11:11am

I have 40 acres in east vinton county off US 50. Knox Energy Has been trying to get me to sign a lease. I have been holding off until I am well informed. But the will use a rotary drilling rig not fracting.

Permalink Reply by Elk Township Resident on February 3, 2012 at 11:13am

Paul, Where off 50 is your property? We have land on Lockerplant Coleman Road. I am curious what was Knox Energy offering?

Permalink Reply by Paul Blausey on February 3, 2012 at 2:55pm

They offerd 10 dollars an Acre and 12.5 percent. I would not except that but will start hagling with them soon. My property is right down the street from the sweet and easy bar and campground.

Permalink Reply by David Ross on February 3, 2012 at 4:34pm

I'm from licking county and Knox Energy has a big clinton well hold in northern licking. The big boys will be around in you neck of the wood if you have the Utica. Knox have taken alot of people in licking for chump change. BEWARE

Permalink Reply by Paul Blausey on February 4, 2012 at 11:22am

David thanks for the great info. I have been holding off from anything. I have contacked a lawyor that the farm Bureau suggest i call. I am going to see him in a couple of weeks.

Permalink Reply by David Ross on February 4, 2012 at 2:13am

Start a londowner group now,talk to you County Exention Agent ,get all the info you can.

Permalink Reply by David Ross on February 4, 2012 at 12:01pm

with a landowner group" numbers =leverage" "leverage = a bigger piece of the pie"!!!!!!!!!!

 

Is the lawyer out of Columbus

Permalink Reply by Paul Blausey on February 4, 2012 at 1:37pm

No he is out of Uhrichsville. I have been reading alot about people who put in the lease that the company you lease to cannot sell your lease unless you get to Renegotiate to a new lease. Have you heard of this? or do you know anyone who has done this? Not for sure how it works but I hope by talking to a lawyor I can better understand what I will be getting into. A large problem I have with getting to involved is I am not from around the area. I can only go by what I learn on-line and by my Farm Bureau. So any help is much appreacheated!

Permalink Reply by Billy Park Whyde on February 4, 2012 at 2:52pm

  Paul if you have the time I would suggest you take a ride down to you county recorders office. Ask the clerk to bring up Knox Energy leases and see if they have sold bundles off to a different company, they may have quite a few records but you will be looking for  transactions with numerous pages.

  Most wells these days except (water wells  and even some of these are done by smaller rotary rigs) are rotary rigs  which range in size small to off shore giants.

  Flipping leases is a profitable business!

  Ok Paul I want to put a well on your property lease it to me for say $50 a acre =$2000 oh boy you say. Ok I come in drill a well that hits the Clintom formation and say it cost me $300,000 to do it. It comes on line and produces say 400 bbls a month at $100/bbl you get $5000 they get $35,000 in 10 months their investment become sheer profit. Unknown to you at the time you signed you gave them all rights as long as gas and oil is found to all the formations below you. You can not then do anything in the line of changing that lease, I take the lease and I sell your lease that I have to say a big player intersted in the Utica Shale and sell it to them at $5,000/acre they just made $198,000! now they will also take a over riding royalty on top of that of say %10.

  Well here comes the big rig you missed out on the $200,000 and your well produces say 800 bbl a day you would get $228,125 a year and then I would get $2,920,000 a year because I took your lease reassigned it with unitization into a 640 acre tract as you missed the small print! 

 Now if you  didn't screw it up by not knowing what you were doing  you could of had the $200,000 plus a higher royalty of say 20% on that same production you would get $365,000 the first year.

  Oil companies make money and do not mind spending peanuts to  to make mega bucs! Be careful and stick close to Go Marcellus Shale the best friend a land owner has.

 

Permalink Reply by 0i7okn54zwbdo on February 4, 2012 at 6:49pm

"Ok Paul I want to put a well on your property lease it to me for say $50 a acre =$2000 oh boy you say. Ok I come in drill a well that hits the Clintom formation and say it cost me $300,000 to do it. It comes on line and produces say 400 bbls a month at $100/bbl you get $5000 they get $35,000 in 10 months their investment become sheer profit."

Not one of the Clinton wells that I've been involved with paid for itself that quickly.  Two years is usually the target.  Any longer than that and you blew it.

Permalink Reply by Billy Park Whyde on February 4, 2012 at 7:08pm

 I threw some figures out Marc my first well Clinton put out 5 tanks the first month, of course wells drop off but I was trying to show what a small investment could do if it tied up his land and the ability to get a top dollar from say the Utica. We could have also went the low route as well say the Clinton well only produces a very small amount where he ends up with very very little and would hurt him in the Utica possibilities. 

  Sure its a gamble but if he dosen't need the Obama change (couldn't resist that, lol )  I would hold off.

Permalink Reply by Elk Township Resident on February 12, 2012 at 8:42am

Bill, There will be a meeting in Mc Arthur next week on wednesday I do believe. Read the blogs here as I forgot which posting it was from.

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