Beaver County Renewal

Some time ago, I read where people wanted to know if leases were being renewed in northern Beaver County. Our original lease was to run out 6/15/15. As of 5/7/15 it has been renewed for 5 more years @ original terms.

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Permalink Reply by Trapper on May 9, 2015 at 2:17pm
Good news! What Twp. And Company?
Permalink Reply by marilyn nesbitt on May 9, 2015 at 3:24pm

Trapper,  The township is Darlington and the company is Chesapeake. We are on the edge of Enon Valley. If you know where the McRoberts well is, we are just down the road.

Permalink Reply by Trapper on May 9, 2015 at 3:29pm
Thank you Marilyn.
We are northeast of New Galilee in New Beaver,Lawrence County and leased to Rex.(just inside Lawrence)
Good to hear of resigning!
Permalink Reply by Nancy LeNau on May 9, 2015 at 3:34pm

Thanks for this information, Marilyn !    Congratulation !  

Permalink Reply by marilyn nesbitt on May 9, 2015 at 6:19pm

Thanks guys!

Permalink Reply by mlb on May 10, 2015 at 10:49am

That is good news indeed.  Most wells only looked marginal but were drilled using old methods.  This shows they have confidence in the area.  Glad you got a renewed.

Permalink Reply by marilyn nesbitt on May 10, 2015 at 11:57am

Thanks mlb!

Permalink Reply by mlb on May 11, 2015 at 12:18am

Just an FYI and this probably should/could be another thread but if you do not have a lease or your lease expires CHK is paying gross on leases that have royalty clauses which state "free of cost". 

I mention this as it gets you out of all the gathering line fees etc that take a bite out of your royalties.  I was very very lucky and they took 1% ( which I am still inquiring about ).  But overall my lease held up and CHK honored the royalty clause.  Just be sure to get one in there if you can.

Good Luck

Permalink Reply by marilyn nesbitt on May 11, 2015 at 8:17am

Thanks so much for the info but we are okay.

                                                                   Marilyn

Permalink Reply by Rich on May 12, 2015 at 11:37am
Hi Marilyn,
I'm right up the road from you by the turnpike. Can I ask what the lease was?
Rich
Permalink Reply by joe on May 15, 2015 at 1:36am

Heard yesterday about Range renewing leases in the southern Beaver county area. The guy I know said that they were doing things a bit different this time around. Instead of large upfront bonuses, they are going with delay rentals. He got a $2500/acre bonus 5 years ago for a 5 year lease. This time, they are offering a $600/acre annual delay rental for the 5 year lease.

For those not familiar with delay rentals, it's basically a payment made to hold the lease as longs as there is not a well in place. Some delay rentals are paid until there is any activity in the unit, which could be as little as clearing the ground for a pad. For others they are paid until production starts. It is all dependent on the lease language. For this particular lease, the $600/acre would be paid up until production starts, and it would even be paid for the first year of production if royalties were under the $600/acre for the year. All other terms of his lease are the same as what he agreed to 5 years ago.

So ultimately, if there was no activity for his parcel over the 5 years, he would wind up getting $3000/acre, which is better than the $2500/acre he got the last time. But there is an incentive for Range to actually get out there and produce earlier since they won't have to pay the rentals anymore if they get the well into production. My guess is they know they are going to drill sooner than later, so this is a way to get the leases cheaper. My buddy didn't mind though since that would mean that royalties would be coming in.

Permalink Reply by Jonathan H on May 18, 2015 at 7:10am

I have heard of companies in Ohio doing the same - going to yearly payments instead of a lump sum; I figure if they find out they can't drill it in the term they can stop payments and cut their losses versus being out the whole amount. Some companies are even doing 1 year leases with options for more years.

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