Lease rates

I was asked to lease to Ascent LLC for a price of $500 recently . Four years ago I signed a lease ainGuernsey county for $6,500 per acre. Has it gone down that much per acreage or are they giving me a lowball price?

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Permalink Reply by Joe C. on July 25, 2022 at 8:08am

Ascent LLC is able to do that with them being the only company leasing in the area. You can hold out and hope they don't remove you from a proposed unit and ask for more bonus money. I had a friend who received an offer from them to either lease for $500 an acre or sell for $6000 an acre. 

Permalink Reply by Steven A Joliat on July 25, 2022 at 2:38pm

It depends on the terms, it looks like a lowball.  Offers last year in parts of Carroll County were $2000-2500 per acre and 15 to 17 percent for 8 to 10 year terms.  For an area with good potential production, a low $500 per acre offer should come with a short primary and secondary term, less than 6 years total, and a royalty in the 17 to 20 percent range without deductions.  This type of offer could be expected to have significant Utica production nearby. Offers would be less if there is no production within several miles or so.  Geology can vary over relatively short distances and that is a consideration as well, unfortunately the average landowner does not have much access to that information in a user friendly form.  Always consult an experienced oil and gas attorney before agreeing to any terms.

Permalink Reply by Sam Moore on July 30, 2022 at 9:43am

Lease rates vary greatly here in Monroe County OH.  Last week I heard of $1000 to $3500.

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