Massive Lease Signing in Ohio!

Residents from eight northeast Ohio counties, including Mahoning and Columbiana, lined up on Friday to lease their mineral rights to Chesapeake Energy.  But they're not coming in alone. They're part of a larger group, the Associated Landowners of the Ohio Valley.

Last year, ALOV formed to address residents safety and financial concerns over drilling the Marcellus Shale for natural gas.

"And you had people already studying the ins and outs of the things the average person doesn't have the time or where with all," said Columbiana county land owner, Curtis Frase.

"Well it certainly made it easy for us. These folks did all the research for us and just felt comfortable going with such a large group like this," said James Voorhes of East Liverpool.

And the group proved there is power in numbers.  In December, it reached an agreement with Chesapeake, which the residents believe goes above and beyond state law to protect their water supply and land.  They also say it was the best deal financially.

"We did it the right way. Sat down, took our time, submitted to 18 different companies, came up with the best one we feel," said Tim Duble.

The packed parking lot could be taken as a sign of the groups success. Between Friday and Saturday nearly 11 hundred leases will be signed.

The entire group is made up of about 2000 landowners, and represents more than 70,000 acres.

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015334grltd9mPermalink Reply by 015334grltd9m on May 4, 2011 at 9:57pm

Riddle: If the Wall Street journal reported a few months ago that CHK invested 1.5 billion in eastern , Ohio, and last night, McClenon of CHK reported that they are seeking a production partner for a significant liquid play in extreme W PA and eastern Ohio, how much is an acre worth in this play when McClenon also stated this asset of CHK is worth 23 billion as leases? 

 

If one is a student of energy companies history, one will find that inspite of more zeros than local independents toss around, the business of these larger entitities is basically the same.  You lease as much ground as you can with initially lower bids and once you amass thousands of acres, you resell or partner up with a larger concern for a significantly higher price.  Folks, this is basic real estate, didn't the developers show us how to buy the farm and subdivide into outlots for Burger King and what not?

015334grltd9mPermalink Reply by 015334grltd9m on May 4, 2011 at 10:36pm
Greg, forgive me but I do not know of any Nomac drills drilling in Columbiana, Trumbull or NE Ohio except the one around Lake Milton.  Yesterday, our timber buyer disclosed that a well is going up in Enon Valley.  FYI CKH just annouced last night that extreme W PA and E Ohio have a significant liquid play, liquid as in hydocarbons, oil.  Once they find another partner, the acreage bonus will go up , significantly as they enter production.
Permalink Reply by Oil and Gas nightmare on May 30, 2011 at 7:13am

So this is a lease between chespk and a landowner, who wants to keep his name out of it and private info is left out... It is not about the Utica, just the Marcellus BUT if you lease the Utica shale also, you should be renegotiate something better.  Read this this recent lease I have, I am posting it for everyone in Ohio and SW PA, becasue in some cases I have seen very low offers, in areas its all most sure to be oil they are seraching for as well.  Be sure to separate everything in your lease, Utica, Marcellus, oil, CBM, etc, If you dont specify what they can do and how far they can go, you have no rights to any $$$ they get for selling that oil or gas,(pretty sure) unless you make them put it in there.  Also learn all you can about your area, especially the geology, search geological surveys for you area, and read my post titled Utica… here we go (actual lease from CHSPEK.)  PS. I have researched a lot of the geology for Ohio and southwest PA and it is known to have oil….so don’t give away Oil, well anything but freakin oil, they are desperate for!

 

 

 

from the land covered

 

hereby or lands pooled therewith. Lessee agrees to act as a reasonably prudent operator assuming the obligation to exercise

 

due diligence and act competently and in good faith taking into consideration the legitimate interests of the Lessor. Lessee and

 

Lessor agree to a signing bonus of Five Thousand Seven Hundred and Fifty and No /dollars ($5,750.00) for each acre,  (and this next part is if they release it with you after it expires)

 

 notifying Lessor of its intent to exercise its option to extend the term and simultaneously therewith paying a lease bonus to

 

Lessor in an amount equal to the original signing bonus, Five Thousand Seven Hundred and Fifty and No /dollars ($5,750.00),

 

NOW this is their % rate  20% GROSS!!!!!

 

Sounds good to me :) but oh yes there are some things in their lease offer that have to change....point is there are leases out the with those numbers you just got to find them. It doesnt mean everyone gets the same thing and all the values of the land are the same but I do think that it is worth way more than $1500 per acre( I have seen that for some of these places.  I am just posting this here because the conversation is about Ohio. :)

 

 

Permalink Reply by Josh on May 4, 2011 at 12:28pm

Gregory,

I think the actual lease is GREAT!  However I think both the bonus money and royalties are going to go up, I wish I had a crystal ball and might be making a mistake not signing now.  I have just heard to much about OIL and if and when it gets out the numbers will have to go up.  They are arlready comparing numbers from the oilfields in TX and expect the signing bonus to range from $7000-$9000 an acre!  However a bird in the hand is worth two in the bush.  I hope we all can make some money in this economy and protect are pieces of ground at the same time.

Permalink Reply by Josh on May 4, 2011 at 2:57pm
We only have one horizontal well in the state so far and I am sure they are not going to share any info yet.  I was told by a source from TX who are talking about the Utica down there.   Trust me I would like nothing more than to know what exactly the buell well is producing, even a woman from CHK said it was doing very,very,very well.  What are those 6 Giant White Tanks for?  Too many unanswered questions and unproven results, but all signs point towards oil and look at what they are paying for it, $5000,$10000, also seen22,000 an acre.  Not saying we will get that, even land in sw Penn is getting $5000.
Permalink Reply by bill h on May 4, 2011 at 7:56pm
I was thinking the same thing when this started in NE PA.  But it's not true.  You'll come to find out that thickness is not nearly as important as thermal maturity, and organic content (and many other variables)
Permalink Reply by BMR on June 23, 2011 at 11:28am
There are way more than just 1 horz well in Ohio.  Where do you get your facts?
Permalink Reply by Jeff Ferreira on May 4, 2011 at 12:43pm
sweet congrat to you all.. Now NY is next..
Permalink Reply by Joe Baran on May 6, 2011 at 11:08am
Horizontal frac wells are under a moratorium.  I've heard that vertical wells are still being fraced in NY, but I don't have confirmation on that.
0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on May 4, 2011 at 11:59pm

Hi everyone...

This link was left by a fellow gomarcellus user regarding the Sullivan cty. discussions. (one about EXCO)

https://news.fidelity.com/news/news.jhtml?cat=Top.Investing.RT&...

Interesting amount per acre, right?   Handkerchief anyone?   We must be like a bunch of farmers chewing the curd in their eyes.

Of course you know many foreign investors are now paying much $ to get a hold of our leases...not a 'made in the USA' if the oil and gas companies keep selling lease interests to non-citizens.   Those in Arab countries are also most likely among the investors...so I guess there is no getting away from ties to using Arab gas and oil if they own some of the leases in the USA.

 

more info at this discussion about foreign investments...

http://gomarcellusshale.com/forum/topics/assigns-clause-and-a-globa...

 

I thought I would mention the above since everyone is still thinking in the 2300-3000 range in some areas...and of course what matters is the density and availability...but really 14K per acre in some areas

of the marcellus and chevron is purchasing the lease interests from our leasees?   What about us?  If they will pay that much to Chief...why are we leasing for so low?

Permalink Reply by Mike C. on May 6, 2011 at 10:28am
Word is that Chevron paid about 5k per acre.
Permalink Reply by Tinamarie S on May 10, 2011 at 10:36am

Mike and Other Blogers

 

What is the going rate for non-drilling parcels?   Looking at parcels 5 acres and under.   I am hearing 3000 to 3500.   DP Penn is offering a bit less for some individuals.    Can anyone give me an idea?

I am in Columbiana.

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