Have you received an offer to buy your minerals? What State/County/Township are you in?

I'm in Ohio/Noble/Marion and continue to receive offers.  14 so far by mail, and another arrived yesterday.  Post your information and I'll draw a map of "mineral interest".    Have your offers increased, remained constant, or stopped coming?  Just curious, and it might be fun.  Thanks.

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Permalink Reply by bo boboski on May 28, 2013 at 2:45pm

go to-  www.bhgis.org/guernseyparcel/     you can point & click on a twp. zoom if needed.  point & click on a parcel & see what happens.  upper righthand corner has more options/layers. experiment & enjoy.Hope you have plenty of time on your hands!

Permalink Reply by evan on May 28, 2013 at 1:03pm

Mr peterson are you located near putney ridge north of Quaker  City

Permalink Reply by scott peterson on May 28, 2013 at 1:15pm

Other s

Permalink Reply by scott peterson on May 28, 2013 at 2:48pm

Computer went down Evan, sorry. Other side of Quaker by Salesville.

Permalink Reply by williet57 on June 3, 2013 at 7:39am

We have 1-1/2 acres that was inherited in Greene Twps in Harrison County   All the property around this land has been leased to Cheseapke I contacted them and they said they are not leasing now.  This is about 1 mile from the plant Mark West is building that plant off of Rt 22 and 151. Anyone know of anyone leasing in that area. The orginal owner  died before he was about to lease and never got a chance to.Any help appreciatedThis sits right in the middle of the land that is leased.

Permalink Reply by Richard Droske on June 3, 2013 at 3:12pm

1.5 acres is probably not enough to get your own lease. The wells need to go down and then horizontal, usually for about a mile. You would need to be a part of a parcel including the properties surrounding you and even then your portion of royalties would be small.

The chances that anyone would spend the money to drill a straight down well on 1.5 acres are pretty small.

If they are leasing and or drilling all around this plot your best bet might be to become a bit of a nuisance to them and sell the land to them outright at a premium (especially if they come around trying to buy right of way for pipeline/access etc).  If they ever drill horizontally on neighboring properties you would have more leverage in this area.

Of course don't take my opinion (or anyone elses on this site) as gospel. At this point I wouldn't spend a lot on a lawyer or expert consultant but it can't hurt to do your own due diligence. Keep an eye on things if possible, see if any drilling starts up nearby, any pipelines being built etc. Try talking to your nearest neighbors. Don't pry about how much they got just friendly chat and ask what they think the activity  might become, what effects it might have on your property etc.

 

Permalink Reply by The Hiker on June 4, 2013 at 2:29am

If a well is planned for your area, and your acreage is planned to be in it, Chesapeake will contact you and offer you a lease.  It's the law.  It is best to come to an agreement at that point since they can force you anyway, if you two can't come to an agreement.  If that happens, you will get considerably less than if you had leased directly and taken the small signing bonus/royalty amount offered.  IMHO.

Permalink Reply by Richard Droske on June 4, 2013 at 4:29am

Whether they have to or not depends on a lot of complicated factors and they definitely can't force you to.

my opinon is based on the small amount of money the lease and possible royalties would generate on 1.5 acres.

 

For the lease you might get 5000 tops for a 5 year lease. If they did put togeter a parcel surrounding you it would probably be 600 acres minimum meaning you would get at most 1/500'th of the royalty stream.

 

Deduct the taxes you would have to pay to hold the land and the capital gains paid on the lease and royalties and you will be making very little.

 

So unless you want to keep the property for other reasons I would at least consider cashing in on its full value.

Permalink Reply by The Hiker on June 4, 2013 at 7:07am

A few things to consider:   The well units have been running more like 200 acres per well, not 600.   there is no way to know the output of a future well, but as an example:  take the Miley well in Northern Noble County, about midway between the dry gas and oil windows.  Use a depletion curve that assumes production drops pretty quickly, ending the year at 0.12 of the initial 30 day average (not IP) rate.  For grins, the 30 day average would be about 1/2 the IP.   Then use the current price for oil, NGL and gas, and a 21% split for the landowner(maybe a little strong).....and you get approximately $8-9000/year/acre.  Add that to the $5000 signing bonus and you've got a nice little pot of $, and you still own the minerals, which makes selling the acre easier sometime in the future.   BUT, you have to wait for that well....and the well may not be as good....and....maybe you just want some money now...

If you can't come to an agreement with Chesapeake on the lease, and they convince a court that they dealt with you in good faith....chances are good that some judge will grant them the right to drill under you and then give you NO bonus, and pay you 12.5% royalty, and then there is your share of the drilling costs you have to bear....I'm sure there are other threads on GMS that do a better job of discussing it, and others who will run the calculation more closely...but in the end, I would think twice before selling my minerals, even one acre's worth.  IMHO, as always....

Permalink Reply by Richard Droske on June 4, 2013 at 11:39am

Well units perhaps but the companies are not willing to go to the the trouble to put together parcels of properties with different owners unless there are at least 600 (in the vast majority of cases, I'm sure there are exceptions).

And yes 21% is very fat. 18 would be the high side and your figures assune a very good well at even 21.

And again 8-9 thousand per acre minus capital gains and taxes is not a lot. Depending on what the 1.5 acre plot could be sold for (does it have a house on it?) you would need to consider how many years it would take to recoup the value you could get right now.

 

Is the property worth 100,000 ? Then rough guess would be 25 years  to recoup the money you coul get right now. 50,000 then 12.5 years etc.  Yes you would still own the property but if they do drill minerals are gone anyways. If they dont you are counting on land appreciation to make up for the costs.

It all depends on the value of the property and the carrying costs so no way for me to say for certain but remember if you get full value now, invest wisely in safe items you could conservatively expect to double that every 12 years or so.

 

And I dont believe that a judge could allow them to drill under your land just because they made a "good faith" offer. These companies are not the government, no eminent domain comes into play. And in any case this is where you would have leverage to get premium offer so that the co. would not have to fight a protracted court battle. Even if true worst case you would lose a small percentage of a small amount of royalties.

 

 

 

 

Permalink Reply by williet57 on June 4, 2013 at 11:44am

the property was inherited and then sold and we kept the mineral rights

this is the only property that is not leased,there is approx. 2000  acres surrounding this land. It is also about a mile from the plant they are building off rt 22 and 151 near Hopedale.

Permalink Reply by The Hiker on June 5, 2013 at 11:29am

This changes things a bit;  If the property (not the minerals) has a selling price of $100,000, that's one thing, but if a gasco or mineral buyer is ready to pay $100k for just the minerals on 1.5 acres, send them my way!

It sounds like there is not much action around your property, with the neighbors unleased, so yes, this also changes things.  If you get a great offer, maybe that works in your situation.

The state can "force pool" you into a unit without your approval, but if the neighbors aren't leased, chances are slim that that will happen soon, since there doesn't seem to be interest in drilling in the area.  There is a process (Ohio) that must be followed...offers, litigation, etc...it is starting to be done, and folks are finding themselves in drilling units if they can't come to an agreement with the oil co.  There is a thread on the subject on GMS and you can find the details on ODNR website.  Forced pooling is not yet law in W.Va, but it keeps being introduced in the statehouse.   Just a matter of time.  Not sure about PA.

My lease is 21%, but yes, you're right, the majority of leases are in the 18% range.  I have a spreadsheet geared to this figure....

Good luck to you!

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