Replies to This Discussion

Permalink Reply by Kathleen on January 27, 2013 at 11:28am

Hi,

I have no business giving any advise at all but I do read a lot on this subject and listen to people I respect.
Here's a google page you can click on that shows many maps of the Utica and Marcellus.
From my perspective you might betoo high north but who really knows yet.
http://www.uticashaleblog.com/p/maps.html?m=1
On this board people post their minerals for sale sometimes and I've seen minerals listed in the center of PA for 3 grand and thats 100% ownership. Now these owners are in areas that the gas co.'s have pulled out of since its dry gas.
I think you should go to that county's engineers office and see if any wells have been drilled or are being planned if your interest is short term. I would do it even if it was long term.
CC had a great point, is it just for the Utica? I would think you would want all carbons below a certain level reserved to you at least, not just the Utica.
You may not know if you made a good deal for yrs but that's how investing works.
Also you need to find out if its leased, since if its not already and no one is knocking on the door it will be yrs before a well comes if ever. On the plus side if its not leased you can have the atty add language you get part of the bonus.
There is so many variables but 1st you have to figure out if the Utica is there and if it is, is it what the O/G co.'s will look at one day.
Th local paper archives will also give you a feel for the area.

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Permalink Reply by Clinton44 on January 27, 2013 at 12:54pm

Hi Edward,

We had a similar situation with our hunting camp in western PA

Only difference for us was that there was infrastructure (Trans Co. Pipeline) in our area already which I believe made it more lucrative for the Gas Co's to establish units and drill our area first.

So that would be my first piece of advise investigate if there are existing pipelines if not it might take a while for the infrastructure to catch up.

Secondly I would advise an independent appraisal of the royalties that you are interested in purchasing.

Also are you just purchasing royalties or the mineral rights as well??

We had a firm from Texas do our appraisal before the group of twelve of us formed a seperate LLC and  purchased the lease and mineral rights from the club. We were advised by our attorney to do it in this manner so no one could come back later and say we cheated the non profit hunt club out of any funds.

Also agree with CC and Kathleen and personnaly I would not want to limit the purchase to just Utica royalties for none of knows what they will drill for in the future.... Also would not want just the royalties I would want my share of all the mineral rights. Which can be done with two sperate legal documents if you so desire.

I remember when I first went to the hunting camp there were always leases for a couple dollars an acre that the companies renewed every five years never drilled many wells (except a few thankfully on the state land which pretty much surronds our acreage, thats what brought the pipeline that exists today that the gathering lines all tie into.)

 As the others advise a good oil and gas attorney is a must!!

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Permalink Reply by Edward Kelly on January 27, 2013 at 1:41pm

Wow!  Thanks guys for the quick and detailed responses.  Here is part of the land owner and my email conversation that will answer some of the above questions that have been asked:

In the meantime; I think it was Rex Energy that leased land next to mine this summer. I'm leased to Range Resources,they told me Rex is doing some drilling. If Rex was to drill on my neighbor,I ,we would still get our royalties at the same rate. As far as you loosing your money,yes you could,but no quicker than a bank or stock market. The gamble is when,not if. This is the largest gas and oil deposit in the world,they are not going to walk away from it.

He did not specify just the Utica Shale but mentioned that is what shale area his property is most situated in.

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Permalink Reply by Jack Straw on January 27, 2013 at 4:12pm

RE: ""anticipated drilling" to take place sometime in the future"

I anticipate that much of Western PA will be drilled in the next 40-60 years; if you are patient, you just might eventually get your money back (sometime in the future) ... and make a bit of profit on top of it.

If you have $5 or $10 Million laying around that you do not know what to do with ..., go ahead, you are only risking a couple hundred thousand .... you doubtless can afford to lose it all.

 

By the way, I have some land that I anticipate will someday have a gold mine; gold and silver were mined only 20 miles distant. I am prepared to sell an interest ... perhaps we should talk. 

 

I also have this bridge in NYC that I have for sale (Brooklyn) .... I will let it go cheap.

 

RE: "Does this sound reasonable? Good investment?"

This sounds a lot more like a blind gamble than an investment.

 

 

All IMHO,

                   JS

 

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Permalink Reply by Jake on January 28, 2013 at 5:20am

Edward,

We are aggressive buyers of minerals and royalty in the Utica/Marcellus, and other unconventional/resource plays..  As many have noted heretofore, much evaluation should be done before you invest $210,000.00 in the deal.  Geology, title work, infrastructure, product pricing, ready market, etc.

I would be interested in evaluating/appraising the proposal for the opportunity to purchase part of he interest. 

If that is of interest, let me know.

Jake

jake@brazoslandandminerals.com

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Permalink Reply by James T Monyak on January 28, 2013 at 5:02am

Sounds really low on price.  I would guess this is out of the Utica Fairway and it would not be a good idea to buy.  It could be many years before it is drilled since it's outside the prime drilling areas.   I would buy in Ohio where they are drilling more now. 

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Permalink Reply by Edward Kelly on January 28, 2013 at 12:25pm

Thanks for the responses everyone.  I have decided not to pursue this any further.  There are better opportunities out there I believe.

Best regards to everyone!

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Permalink Reply by Jake on January 28, 2013 at 3:10pm

Edward, I would appreciate the opportunity to pursue this. Please email me directly.

Jake

jake@brazoslandandminerals.com

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Permalink Reply by 0agf12owuyn7d on January 30, 2013 at 6:56pm

Smart man! Stick with your thought's!!!

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