Some landowners in the area are now nervous because they didn't sign a lease or signed one and were not paid.  Some are talking about signing any lease, just to get the bonus money and are giving up on the landowner friendly language.  Land groups have not been abled to acheive good lease language plus the large bonus and royalties that were seen in other shale plays because the oil and gas companies aren't willing to sign true gross leases with landowner friendly language and the market isn't in their favor.  Now the potential lessee's are stating that some townships in Belmont County are not wanted, which will make the language, bonus and royalty even more unfavorable to the lessor.  Brokers are stating that if you want leased, here's the lease and the terms are not negotiable. 

 

With Natural Gas prices being so low (and an election year), it may be best to hold out for a few years until prices rise, infrastructure gets built and the earthquake and coal issues are resolved.....rather than sign the standard o&g lease under their terms.  For this to work, the landowners must stick together and not let the o&g companies split them apart.  If you're in a group fighting for lease language on your terms, stay with them and see what you can do to help the group. 

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Replies to This Discussion

Well said!

If this play works out then there's zero reason for a landowner to rush into something that isn't in their best interest. Hess didn't spend hundreds of millions of dollars for nothing down your way. People need to be patient, even if they really need the money. For those who were not paid they need to get those leases released and look at it as a blessing.

They need land to drill upon if they don't want to pay now well ya hang in there and they will come about.

Personally, I think the "greed" factor has taken over many and, some landowners will wait to long and end up backed in a corner and either have to sign or, be left out of a unit. If you're an "island" you've lost all negotiating power. I for one feel that the time to lease is now. Yes, we would all like a zillion dollars for our lease and lease addendums out the ying yang but I and many of my neigbors feel that it is better to take a couple thousand per acre and 16% now, as opposed to waiting a few years in hope that we get lots more.............the royalties is where the money is. The company we are leasing with has given us language in the lease that we all fill comfortable with. Good luck all....and dont get too greedy...........there are many many instances in the Marcellus of landowners waiting toooooo long to lease.

Well put.  If you get a good lease and you're happy with the money then go ahead and lease.  I agree that holding out too long can be detrimental.

Marcus that is the idea behind holding out, to get a GOOD LEASE for what the real worth is. Not signing a bad lease and getting nothing in return. But the whole idea is making landowners aware of what the value is because the O&G will try to get it as cheap as they can. With landowners being educated landowners will be the fortress the O&G will need to put the puzzel together. 

Billy - Dont you believe that one can "hold out" to long? I do, and I also believe that this is usally caused by greed. I agree with Marcus. If you feel comfortable with the lease, sign it! Don't worry about "getting top dollar" or, "what your neighbor got".

You make the statement "the whole idea is making landowners aware of what the value is". I hardly think that you or anyone else knows what the value is, unless, there is an existing well offsetting your acreage. At this point, most of the big land positions have been secured by the large company's. In the very near future we will see what the holdouts in PA have seen. If you hold out too long you will lose your negotiatiing power and they can, and will, drill around you. Timing is everything...

  PA was hit by the GAS glut unless Chevy can get the energizer bunny to push their Volt I can't see a MAJOR price drop in oil. Even so I recall the early 80s where oil went from about $11/bbl to $38! I saw it drop back down but that qt. of Penzoil retail price never dropped! 

  Will the O&G Wildcat the area in probing for what they want or will they stay in say Columbia, Harrison area to drill it into Swiss cheese? Like many others in here the idea of the money sounds good but were we all headed for the poor house before someone said Utica? 

  We have seen those in here that signed early losing in some cases $3000/acre in lease bonus and 7% in royalty.  We know that the O&G has acquired probably more land than they can even drill , which will result in many a landowner getting HBP by larger unit size, I believe.

 Drill around? My guess is yes they could but is it worth the associated cost? Every time they turn that bit they have to track it, if enough landowners in a area are not leased they will not try to drill serpentine bores around properties.

 It all boils down to this can you live without a well? Do you want a well but with a lease that assures you of property protection, a lease were they can not simply at their whelm  tie your property up for generation?  

This was in the CHK lease that they wanted me to sign:

The right to drill injection wells to dispose of "brine, completion and production fluids, waste water and any hydrocarbon related substances from any source, including, but not limited to wells on the Leasehold or lands pooled or unitized therewith or from properties and lands outside the Leasehold or pooled or unitized therewith, and to conduct all operations as may be required, for so long as necessary and required by Lessee for purposes as herein provided."

All for the sum of $1000 per year total, not per acre per year.

 A fine example of why we as landowners should be concerned more about what the lease is than "They will drill around me"

Give me a break Billy. If that is all you got from my post, put your glasses on and read it realllllly slow! I was not suggesting you execute anything they throw in front of you.

 

R. East your message is somewhat distorted. You post doom and gloom"Personally, I think the "greed" factor has taken over many and, some landowners will wait to long and end up backed in a corner and either have to sign or, be left out of a unit. If you're an "island" you've lost all negotiating power. "  " In the very near future we will see what the holdouts in PA have seen. If you hold out too long you will lose your negotiatiing power and they can, and will, drill around you. Timing is everything..."

O see where you get what you wanted in a lease "The company we are leasing with has given us language in the lease that we all fill comfortable with. Good luck all....and dont get too greedy...........there are many many instances in the Marcellus of landowners waiting toooooo long to lease."

  What I did not see however was any mention of holding out for a decent lease. Your acceptance of a lease does not mean your lease may be suitable for others. We all have specifics to what we want in a lease. " I was not suggesting you execute anything they throw in front of you." But can you show me where you advocated for a landowner to hold out for that decent lease? 

   Your negativity of doom and gloom using the same words drilled around has been labeled as "scare tatics" you'll have to excuse my perception of of your choice of words or lack of, Thank you Billy

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