Replies to This Discussion

Permalink Reply by Tyler James on June 30, 2014 at 2:37am

"I have 107 acres in Elizabeth township. I was approached by EQT for leasing this property. Is there anyone in this group that might be able to give me info on dollars per acre and royalty percentage and is it gross or net. I have the largest acreage in the area. Appears that I am in the sweet spot with regards to being the largest land holder. I live in Ohio and have no information on leasing in Pa. How big are the unitization units in Pa? Is there a minimum or maximum? I do not own the land but have the oil/gas mineral rights. Any help with negotiating this lease will be greatly appreciated!"

I know that EQT is not the only game in town.  Make sure you look at all of your options.  EQT has been and still is, very active in Forward Township, however, it wasn't until recently that they took any interest in Elizabeth Township.  

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Permalink Reply by Brian Werner on June 30, 2014 at 5:08am

Dale:

EQT has a confidentiality clause in their lease, so it may be difficult to find out what people are actually signing up for. I have friends in Elizabeth Twp  and I only know they were initially offered 18% net with a 1280 unitization size. A lot of factors may influence the signing bonus, like well pad or no welll pad, the amount of acreage and the exact location. As general advice the lease wording offered by the companies stinks. At the very least, log on to alov.us and compare to the landowner group lease, then get a lawyer. One of my E. Twp friends found a lawyer who would work by the hour and another friend got a lawyer that wanted a percentage of the signing bonus ( I think he wanted 5%, but the acreage was much smaller).

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Permalink Reply by Tyler James on June 30, 2014 at 5:43am

I completely agree when it comes to getting an attorney, especially if it is for a surface lease.  I have seen the language given by EQT in regards to net royalties and it is not in the best interest of the landowner.

Lessor Beware of Net Royalty language!

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Permalink Reply by Dale on June 30, 2014 at 2:45pm

Brian, thanks for the response. I am just starting to negotiate with EQT landman. The initial offer was 18% net with 1280 unitization size. I saw the land map of the area where they are leasing and I have the largest area - 107 acres of raw land - I am in their sweet spot. I only own the oil/gas rights - not the actual property. I am countering with 17% gross and will try to work with the unitization size. I would like to down size or get a guarantee that all my acreage will be used in the well site unit. I was offered 4000.00 per acre. 

Can you give me the names of the attorney.

Thanks

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Permalink Reply by PuP on June 30, 2014 at 11:06am

EQT is competing with Huntley and Huntley in the area but I would go with EQT. Huntley and Huntley has yet to drill 1 marcellus well and EQT seems to be pushing a drilling and well program nicely.  I have heard of anywhere from $2,500 to $3,000 bonus and 18% royalty.

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Permalink Reply by Brian Werner on July 1, 2014 at 2:16am

Dale:

The $4000/ Acre bonus sounds in line with what my friends were offered. They too are just entering into negotiations so the the verdict is still out on the attorneys that they found. I don't want to recommend or not recommend them. From the discussions I've had with my friends, the 5% lawyer's level of expertise did not impress me in that he was willing to accept much of the standard contract language. He claims to have handled a large number of leases, the problem is deciding if he handled them well or not or did he really even fully understand the lease language. Oil & gas leases are a specialty and few attorneys not working for the oil & gas companies understand the intricacies. I can give you two leads. The first is Dale Arnold from the Ohio Farm Bureau (darnold@ofbf.org), I believe he can give you  the names of some experienced oil & gas lease attorneys, but I'm not sure if any  practice in PA . But they may know who the experienced PA attorneys are. The second is Jake Polochak, he is an attorney from PA, Washington county if I remember correctly. He spoke to the forestry group that I belong to back in 2011 about oil & gas  leases and made a good impression on me. I don't have any other contact information on him.

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Permalink Reply by Dale on July 1, 2014 at 4:06am

Thanks Brian. I have been and heard Dale speak at an oil/gas meeting. He was well informed and talked openly without being on the driller's side. He was speaking on behalf of the large farmers.

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Permalink Reply by Tyler James on July 1, 2014 at 3:20am

Sorry Gentlemen, Beware Gross Royalty Language, rookie mistake.

EQT is a great company.  However, I know from experience that their language is shifty at best.  Also, look into the lawsuit they have going on with about 70 landowners over in Forward Township.  EQT actually filed suit against the landowners over some ancient lease language.

Also, I know of one attorney in particular that is setting up his own landgroups in Elizabeth so beware of him.  Just make sure you know what he is proposing.

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Permalink Reply by Gas Boy on July 22, 2014 at 11:01am

I'd go with EQT - they have drilled and producing wells in Greene Co., Armstrong Co., Clearfield Co., and I believe some in Clarion Co. as well.  They like very large units so they can drill very long laterals, which equates to more stages to complete and more gas coming from the well bore.  H&H has yet to drill one well on their own in PA.  For any operator, drilling horizontals is a large learning curve.  I'd trust my royalties to a company that has an already proven track record.  I wouldn't want to be the "guinea pig" acreage tract for a companies first well............

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