Gulfport Energy-Guernsey County, Ohio

My property in Guernsey County is already leased to Anadarko but I did get a mailing yesterday from Gulfport Energy offering leases at a per acre bonus of $5000 and a 20% royalty rate. They are having a huge lease signing event this weekend in Cambridge.

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Permalink Reply by Tom Essey on April 25, 2012 at 10:45am

i attached the lease someone sent to me.

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Permalink Reply by Sharon on May 7, 2012 at 11:17pm

How should we interpret the marketing enhancement clause, especially the parts I've italicized?

It is agreed between the Lessor and Lessee that, notwithstanding any language herein to the contrary, all oil, gas or other proceeds accruing to the Lessor under this lease or by state law shall be without deduction, directly or indirectly, for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and marketing the oil, gas and other products produced hereunder to transform the product into marketable form; however, any such costs which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from Lessor's share of production so long as they are based on Lessee's actual cost of such enhancements.

Permalink Reply by Gayden Parker on May 8, 2012 at 4:28pm

You do realize that the term is 5 years with an option to renew for an additional 5.

Permalink Reply by Chartist on May 8, 2012 at 7:54pm

I don't like those enhancement clauses, they sound too much like "net" to me.....I currently get paid based off an Appalachia index for each mmbtu.  That index looks like the Henry Hub spot plus pipeline transportation costs from Louisiana.

 

I do like the $5K per acre though.....As long as I got another $5K per acre upon option renewal, I'd be inclined to accept that offer....

Permalink Reply by Finnbear on May 10, 2012 at 8:26am

Read "Lease Term" in the body of the lease and also "Production" in "Exhibit B" VERY carefully. You aren't likely to ever see Gulfport pay the signing bonus a 2nd time.

Permalink Reply by Joseph Smith on June 11, 2012 at 2:27am

Can anyone tell me if the 20% royalty was based on Gross or net proceeds?

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