Offer in Middlebury Center from Shell

Friends of ours on Hornsby Hollow in Tioga County, PA have been approached by Shell to lease their OGM's for 5 years @ $300 per acre or 10 years @ $1,000.  Any thoughts on whether they should consider the offer?

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Permalink Reply by Deb Reynolds on June 20, 2014 at 2:14am

following!

Permalink Reply by Lila Weaver on June 20, 2014 at 8:42am

How many acres in the parcel at that offer?

Permalink Reply by Landowner on June 20, 2014 at 10:26pm

They only have 17 acres.  Their current lease expires in March of 2015.

Permalink Reply by David Perotto on June 21, 2014 at 3:16am

who is the current lease with? If not Shell, time to get a bid from the other company and get the pricing up.

Permalink Reply by jett on June 24, 2014 at 5:57am

If I did the math correctly (not my best subject!) that works out to $5100 for 5 years or about $1020 for each year or approximately $85 per month for them to get the legal rights to have access to drill on the property. Are they good with this? Is the lease itself good with the addendums and the royalties?

Permalink Reply by Jack Young on June 21, 2014 at 4:09pm

There is no other company leasing in that area. I've leased them my acreage near there on those terms. It's the best option available right now.

Permalink Reply by Darrell Weaver on June 22, 2014 at 12:24am

I would have to ask myself .............why would Shell want to renew so early at such low terms..........

Do they know something they are not disclosing............hhhhmmmm..............???

Permalink Reply by JOE REDDING on June 22, 2014 at 2:01am
If they want to lease it now they may really want lease it later, I would wait and see.
Permalink Reply by Darrell Weaver on June 22, 2014 at 8:24am

I agree 110% with you Joe..............!!!

They are going after the low hanging fruit now.......

Permalink Reply by JOE REDDING on June 22, 2014 at 9:22am
If Shell didn't have something planed of the area, they would simply let the leases expire. Why would they spend money on land that they didn't need?
Permalink Reply by Jack Young on June 22, 2014 at 10:09am

If they want to sell their acreage, as they're trying to do with a 220,000 acre position in western Pennsylvania, Shell will work to keep their lease position together until they can negotiate something. These prices aren't low compared to what's being paid to the west, and they aren't renewing early either. I'd say what they're doing is just normal lease maintenance. Of course there may be something good there and waiting will pay off, but the opposite is true as well. We were getting $2600/acre in western Potter County four years ago, and now we're getting nothing - no offers at any price. I know people who held off signing hoping they'd get more, and as long as you know the risks, that's always an option. My personal decision in this case was to lease now, but that's a call each landowner has to make.

Permalink Reply by Trapper on June 22, 2014 at 10:45am
Jack can you provide documentation regarding the claim of Shell trying to sell acreage in WESTERN PA? I have seen this mentioned on GMS by others but never backed up with any documentation. With the high likelihood of the cracker being built here and agreements with several producers assuring ethane supply for it, I believe Shell has the "wet" holdings in Western PA and find it curious that these would be divested while their DRY assets in NE PA would be retained.......makes no sense to me.....?

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