Replies to This Discussion

Permalink Reply by Peter Schueler on December 6, 2010 at 11:26am

James,
You seem to be very knowledgeable regarding the O&G business and local issues. Thanks for sharing that knowledge with us. Might you be employed or associated with the industry? I expect that industry personnel keep track of sites like this to see what's being said by local landowners. These discussion sites are a great new format to help landowners get local information with the understanding that not all of it will be accurate.
My own situation is on hold after Wellington Resources has disappeared from its lease discussions with me. My property is in the northwest corner of Nottingham Twp. several miles from where Kenyon/CHK seems to be active. They were not interested in my property two months ago when I called their local office. I'm in the wait/see mode for the time being.
There is an interesting article in the New Philly times-Reporter about the MWCD leasing their lands:
http://www.timesreporter.com/features/x1790523010/Could-gas-wells-s...

Permalink Reply by James Harber on December 6, 2010 at 2:46pm

I am associated with the industry, I am a Landman/Buyer for my own company. I have worked in the past for Kenyon/Chesapeake
in Harrison County over the last year. Prior to that I worked doing leasing in Northern PA in the heart of the Marcellus Shale play. I have more than 25 years expereince in the oil and gas industry.
Please understand that most Landmen will not share these things with you, nor the addendum's. It usually doesn't come up until you take the lease to and attorney to review it.
But, my primary concern at the moment is to help educate landowners like yourself to know what you need to know to taylor fit the best lease terms for your future. It isn't only about the bonus price you get on the front end, it is also about the percentage of royality you get overall, including the right addendum's that best suit your particular situation due to size of property and several other combinations. I always believe having and attorney review the lease is good, I have dealt with a couple of good attorneys in the area who I believe actually knew what they were doing.
I do know that Nottingham Twp is not on the Kenyon/CHK radar at the moment, but that can change on a moments notice, if it does you will be sitting pretty when it comes time to sign a lease, just keep that in mind.

Permalink Reply by Peter Schueler on December 7, 2010 at 12:39pm

James, Thanks for the response. It seems there are many people who would like to participate as advisors in the leasing process. It seems to me that we landowners would be wise to put a cap on their compensation, that is to try to limit that compensation to an amount consistent with the service rendered. For instance, when advisor compensation is based upon a percentage of the lease bonus or a per-acre amount, that would penalize larger landowners. A doctor does not look at your bank account to determine his fees. Why should an advisor use acreage for determining fees. Should the fee be 20 times higher If you own 200 acres compared to a 10 acre landowner? I'd like your thoughts on this.

Permalink Reply by Nate on December 7, 2010 at 2:39pm

If this were facebook I would like this comment. Haha

Permalink Reply by James Harber on December 8, 2010 at 9:10am

That is a fair question and I think that I'd have to say whatever the parties involved can agree is a fair value for the effort being done on their behalf,then that would be the terms. It is not a cookie cutter kind of situation, as each landowner may require different addendum's and then again, the company leasing has to agree to the terms. In most cases there has to a willingness to compromise, otherwise the company will walk away from the leasing not lease at all. You have to keep in mind that there are plenty of other landowners who need the bonus money now, whether or not the gas company ever drills on their property or not. Once they feel too many addendum's are being requested, they can cease all further communication and then 100% of 0 is still zero,
You have to weigh out what each particular landowners needs are and go from there.

Permalink Reply by Buckeye Fan on December 6, 2010 at 11:41am

Thank you for the advice, both Wellington and Kenyon have been involved. I am very familiar with Range Resources but have not heard of them in Harrison County (yet). What have you heard about the group "Associated Land Owners of the Ohio Valley" ?

Permalink Reply by 1s7k1qp9wk1t7 on December 6, 2010 at 7:09pm

I was told that the per acre bonus thats being paid on the 5 year lease is paid to the LAND OWNER regardless of who owns the mineral rights!!!.....SAY WHAT???....how could that possibly be???

Permalink Reply by 1s7k1qp9wk1t7 on December 7, 2010 at 3:39am

UPDATE:....no truth to THAT ugly rumor.....the lease money is, in fact, paid to the holder of the mineral rights.....that sounds more like it!

Permalink Reply by James Harber on December 7, 2010 at 7:12am

The lease is only about mineral interest, if you don't own the mineral interest, then you will not get paid a dime. If the drilling company does actually decided to drill on the surface of your property, you will be offered surface damages in the range of $15,000. plus or minus depending on the location of the well pad site. This is a one time payment only, if they get a well, you will be entitled to yearly maintance fee for the road being on your property, those things will be determined if and when they do get a well. I hope this helps your understanding of the overall process.

Permalink Reply by 1s7k1qp9wk1t7 on January 18, 2011 at 4:33am

So is the gas boom over already? Has Chesepeake pulled up stakes and gone home? There was a frenzy and now not a word from anyone? Can someone who actually KNOWS whats going on give us an update? Thanx!!!....also, whats the latest word on Chevron coming into the area?

Permalink Reply by Nate on January 18, 2011 at 5:59am

Chk has more or less stopped leasing open acreage. They are now focusing more on making deals with production companies that are holding "Held by Production" acreage. I think they realized they were the only real game in town when they were bidding on the landowner group packages that were going for big money. Also wall street analysts were not impressed with their spending spree on acreage. So they have retooled more or less from what my conversations with them and other industry people have concluded.

Permalink Reply by Josh on January 18, 2011 at 6:01am

-Donald what have you heard about Chevron?

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