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Permalink Reply by PA Joe on September 30, 2015 at 9:35am

Don't sell!!! If they offer to lease you could probably expect 2000-2500/acre for 8/8, so you would get 3/8 of that dollar amount. The days of 4000 and 6000 per acre are dead forever as these companies were using debt to pay these prices and burdened the wells so much they could only stay afloat (many of them) by borrowing more. The day of reckoning with the banks is nigh. The lease would likely be for 5 years and if they don't drill in that 5 years you could accept a renewal (or not) by which they have to pay you the same dollar amount all over again to have the lease "renewed" for another 5 year term. If you sell, or feel compelled to, just sell the Marcellus rights only (called a pugh clause). There are other oil and gas horizons beneath the Marcellus which may wind up being more prolific and if you sell, neither you nor any of your descendants, will see a dime and you will have "sold out cheap". 

Hope this helps.

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Permalink Reply by Larry Starks on September 30, 2015 at 12:21pm

Thanks PA Joe.  I was not aware of the pugh clause

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Permalink Reply by Heidlebergman on September 30, 2015 at 4:01pm

I believe you are looking to sell outright your mineral rights.  PA Joe's answer implies that you are interested in leasing your rights, which are already under lease.  The tract is held by production from the Alliance/Seneca Upshur well.  Antero went through all of Doddridge County a few years ago and bought the Marcellus rights (from a farm out or an outright assignment) from smaller companies that  were holding the Marcellus rights with wells producing from shallower horizons.  This is an educated guess, but I would say Alliance (maybe even PDC) has the gas rights to the top of the Burkett Shale.  Antero through a farm in/ assignment got the rights from the Burkett to the top of the Onondaga (Marcellus base).  Below the Onondaga I would guess that Alliance or PDC still may have the rights...which would include the Utica.  I'm assuming you receive a royalty check from Alliance?  I am a bit confused...you say Antero has two wells on the property, and also is planning on drilling horizontally in 4 years?  Are you currently receiving royalty payments from Antero? 

Regardless...I know the current market price for fee oil and gas is going for around $1000 an acre and it is dropping.  Whomever were to buy your minerals would be subject to the original lease to Seneca Upshur.  Antero may have contacted you about amending certain parts of the lease.  There are a lot of variables out there that could add or subtract value to this property...Whomever purchases your minerals is doing it for the soul purpose of creating a cash flow for the royalties.  In my honest opinion as a God fearing man, if money is not an option I would assign the minerals and the royalties to a local church or your alma mater.  If it is a large enough institution let their lawyers handle it..and you would get a nice tax credit.

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Permalink Reply by Nancy Mosley on October 5, 2015 at 1:37pm

Do you have siblings, or cousins, who also own some interest in this acreage? Perhaps a relative might want to buy your interest. Keep it in the family.

When they finally drill a horizontal well, you could get a good payment for a few years. A very different thing than (probably) what you get for your current wells.

A lot to consider. You have received some good responses, and a decision like this should have as many facts to consider as possible to be properly decided.

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