WET UTICA Worth $35k PER ACRE ??

Since the New Production #'s Are Out From The Wet Utica Wells..The Trend Is Showing That The Utica Acerage Is Headed Upwards Of 25k-35k Per Acre! It is being compared to the Eagle Ford In Texas. What Are your Thoughts And Opinions??  Some Texas Leases Were $30k Per Acre!

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Permalink Reply by Craig on May 23, 2012 at 4:32am

ASk that same family what they are being iffered today.  It will be 600 or less, if they can find someone to lease.

 

Do the same in Potter County PA.  I can list numerous other counties across the country. 

 

It is all about timing - if the money is good, it's better to get in than be left out.

 

If the wells are being drilled, its better to be in a Unit than not.

 

The Texas example is an extreme.  The Ft. Worth area saw a huge spike in lease prices, due to CHK wanting publicity and leasing a park for ehorbitant amounts of money, and it ballooned from there.

 

Today, and for the past few years, if anyone gets a lease offer, it is WAY lower - in the 600 range.

 

In Potter County PA, I have friends who cannot even get a lease offer, and they have actively marketed their properties to the the Oil and Gas companies with leases next door - the timing was important, and I had previously advised them to lease, becasue drilling was imminent, but they held out, and now they have nothing, and no interest.

 

It happened in MI as well - a local smaller drilling company had been working the area hard, and drilling, and had a partner willing to put the money up to pay good money, and drill.  CHK and others came in, and lots of people held out for more money, CHK offered it, then walked the leases and did not pay - the geology turned out to not compare with other areas they had, other projects they had, but the local guy is still drilling.

 

Understand that just because you think it is going to always go higher, it doesn't.  It also does not have to go lower.

 

It is all about timing - if the money is good, and the timing seems right, then why not?  Greed?  It's what we accuse the oil and gas companies of, but we al have the green monster lurking in us.  Gomarcellus Shalers are not different - and this means me as well.  It means us all.

Permalink Reply by Kathleen on May 23, 2012 at 1:55am
I wonder if we look deep into these big numbers where was the property. An acre in the middle of the unit maybe? When they got closer to urban areas they have to make an offer big enough for a very small landowner to sign. If I had 1/2 an acre and they offered 500 or a thousand I think I would pass, if they offered 7 or 9 than I bet I'm in.
I know of someone whom had a hair less than an acre near a test well a while back and he was the only one left. He asked for 7 thousand and got it quick (I do not know the royalty terms). On his other larger parcel years later in columbiana he got 5800 20%. I think these high numbers have so many layers to them its hard to figure out if a 100 acre parcel would ever get 15 20 grand per acre.
My point is if they really need you and your small than the offer can be bigger without fully breaking their bank. I also know of someone in Salem who got offered 10 dollars an acre just a few weeks ago with the standard boilerplate lease that allowed injection wells,pipelines, etc.. It's all about where you are when or if they need you. They obviously did not need that Salem parcel yet but really needed that test well small parcel.
Permalink Reply by Quincy Spitzer on May 23, 2012 at 3:19pm

I believe that no one accuratly knows the true potential value of the "WET" Utica acreage! I do agree with you there are allot of  people on this site trying to manipulate and throw negative ideas out to the land owners. The research I have done tells me that being patient is a good thing , but timing is everything, and that this land could be worth 10 fold more than we are taking now! There are allot of things to take into consideration that help or hurt the market. As NG prices rise and as we get new and better energy policys, the leasing rate and price per acre will and should go up. Right now I think $6000-$8000 upfront with 18%-21% @ the well head is a good price. In a few years it may be $16,000-$30,000. Only time will tell. I do know that this liquid rich geology is worth allot of money. In the end everyone needs to make a profit.. The best thing to do is gain accurate knowledge to contract a fair lease. And stop listening to the negative comments from all the land men.

Permalink Reply by time will tell on May 23, 2012 at 3:29pm

I'm with you there Quincy .

Permalink Reply by Cheryl on May 24, 2012 at 3:48am

I agree - we need to remember that this isn't a private forum...it's a fact that this discussion board is frequented by landmen as well as landowners....

Permalink Reply by Quincy Spitzer on May 24, 2012 at 4:28am

Allot of these landmen are trying to misrepresent and devalue our land. I have every reason to believe that this land very well could be worth that $35,000 per acre figure. A local realitor approached my bordering neighor who is not currently leased and who owns a 312 acre farm. The realitor was representing a buyer from Dallas TX. They were insterested in buying the property and were upfront about buying it strictly for the gas and oil investment. There first offer was for $19,500 per acre! I am sure there is something very valuable in the ground for that kind of money being offered.  I am currently leased and I have not been approached. It seems like they were only interested in land that did not have a lease on it.

Permalink Reply by take the money and run on May 24, 2012 at 4:45am

Where are you located?

Permalink Reply by Joseph-Ohio on May 24, 2012 at 4:57am

Our land is in Richmond Township, Ashtabula County, Ohio and within the 'High Prospective Yield Core Area' as identified by the Ohio Geological Survey.

Where are you located ?

Permalink Reply by Patricia Patterson on May 24, 2012 at 5:04am

I am in located in Eastern PA and activity has been very strong over the past few years in the Marcellus. Almost everything is leased and/or HBP. I have personaly seen some parcels that are not leased that include minerals being appraised for $25,000-$30,000 per acre. finding land that is not leased is like finding hens teeth and it appears that the investors who are late to the game will pay anything just for a seat on the bench. this is a very long term game and there are lots of shale plays and lots of risidual income to be had. Look at all the Billionairs that are made from the GAS & OIL business. There is so much attention to the Marcellus and Utica shale that everyone forgets that there are several other plays that will be drilled and produced in the future. The economy is bad right now and there is no safe place for people who have money to invest... EXCEPT in ENERGY!..Lets see what the mineral acres are worth 10 years from now when the demand for NG is strong and we are exporting liquids! We need to stop selling ourselves short! Everyone needs to start coming to reality and realize that we have something very valuable. All good things come with time!

Permalink Reply by Joseph-Ohio on May 24, 2012 at 5:16am

It would be nice to be able to afford to wait 10 years down the pike.

Let those with deep pockets wait.

Let those without deep pockets garner a fair price for their land leases and their natural resource development.

I and my family fall into the latter category.

We are of the persuasion to lease now for a fair 'signing bonus' and use the lease term and 'signing bonus' to allow / afford the wait.

Drop me a line if you're a landman and want to talk turkey.

I'll give you more details when you introduce yourself.

Bring money. 

Permalink Reply by Bob Jenness on May 24, 2012 at 10:09am

The antidote to the "need money" vs "holdout" may be landowner grouping.  There are at least 2 viable solutions for such grouping hereabouts, and the large acreages they contain should empower their landowners to get much closer to the true fair value than any individual with high urgency dealing one-on-one with a "landman".  What we all need is accurate data on the estimated values, so thanks to those in this forum who are trying to add that data, and no thanks to anyone who would try to mislead us.  I only hope the group negotiators are as sincere and diligent as needed.

Permalink Reply by Lance Nimmo on May 25, 2012 at 2:07am

If that guy doesn't take that offer, he's insane. $6.4 million! That is the easiest decision I'd ever have to make.

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