Is $6000 sgning bonus for 3 years and 20% good offer?

Anyone else getting offers?

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Permalink Reply by alexander on August 21, 2016 at 7:41am
From recent post I have seen on here, that is a very good offer. As they say, "the devil is in the details". I would suggest to have the lease looked over by an attorney.
Permalink Reply by james on August 21, 2016 at 7:55am
Thanks, I will be very cautious dealing with gas/oil companies.
Permalink Reply by Teresa Kline on August 21, 2016 at 8:08am

James mind if I ask what county or part of PA. you're in ?

Permalink Reply by Billy Park Whyde on August 22, 2016 at 6:11am

A big question is $6,000 for what? How many acres, what are the terms for renewal, how is it to be paid (many in here thought they were going to be paid but were not,then what?

Permalink Reply by Nancy Mosley on August 21, 2016 at 8:06am
Where is this? Agree with he comments.
Permalink Reply by Frank Walker on August 21, 2016 at 10:06am

There is insufficient information to allow an intelligent answer to the OP's question.  His numbers are superficially decent.  But the number of unknowns is vast.  For example:

The OP prefers not telling us his county, so we don't know whether this is just Marcellus, Marcellus + Utica, or possibly even Marcellus + Utica + oil + NGLs.  Or is he giving away his oil (if any) and his NGLs (if any)?

Then there are the obvious issue of deductions, "market enhancement" poison pills, and so much else;  proper protections for his land, vertical severance, pipeline poison . . . the list is endless.

With so many unknowns, I would have to classify the OP either as a form of troll, or else the poor fellow is unaware that royalty fraction and bonus mean nothing if the remainder of the lease is not friendly to the Lessor. 

Permalink Reply by PA Joe on August 22, 2016 at 1:03am

Those are great numbers and tell me they must need your land to be part of a planned/permitted drilling unit. The days of these numbers died (except in cases like this) with Aubrey McClendon. They were never sustainable. I received 4000/acre back in 2011 (Marcellus only, Greene County) and am happy I got it as I am happy for you if you get 6k.  Its funny, if you read company quarterly earnings over, say the last 5 years, they consistently lose money every quarter. Often hundreds of millions of dollars per quarter. The reason being is that these lease bonus prices, when added to the cost of the wells, and lower commodity prices makes the payback too long for the shale players to turn a profit on their wells. Now, there are certainly exceptions to this and if I had it to do over again I would take a lower price per acre with as big a royalty as possible and NO FEES. I think you could negotiate this. Good luck!!

Permalink Reply by Gary Keeney on August 22, 2016 at 1:19am

I would like to know what part of Pa?    I have a landman trying to get a time to meet to extend my lease in Tioga County.  I watch this site often, to keep up on everything.   Thanks.

Permalink Reply by Frank Walker on August 22, 2016 at 1:26am

Tioga County offers today are well south of 6000/20/3 for Marcellus only.

Permalink Reply by Gary Keeney on August 22, 2016 at 1:43am

I don't expect to get close to that here,but I am looking to find an idea where things are locally.

Permalink Reply by Frank Walker on August 22, 2016 at 2:47am

I would guesstimate south of 2000.  But in certain regions of Tioga County the Utica is a wild card.  Me personally?  I might let 'em have the Marcellus for 2000, all other lease provisions being benign, but I would not hand them Marcellus + Utica for 2000.  Not a chance.  JMHO, of course.  

Permalink Reply by Gary Keeney on August 22, 2016 at 3:28am

Locally first offers have been around $1400 per acre and 13-15% with deductions. My current lease is a no deductions, and a lot of protection.  I have no intention of going backward as I am within 2-3 miles  from some good Utica wells.  I have been working with  group and a good mineral manager so taking a first or even second offer is not in the plan.

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