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Permalink Reply by Billy Park Whyde on January 29, 2012 at 4:59am

  Take the time to look over GOM  there is many many factors to consider in a lease. From bonus money, length of lease, royalty percentage, unitization,   reassignment of leases (flipping leases), companies with bad rap sheets mentioned in here, protecting your surface area, pipe line right of ways you name it.

  When I see someone come into here and ask the question as you did is seems as if you are going to lease. I will assume you have been contacted and the lease money sounds good to you, but is it really? Are you being offered above $3500 per acre, what shale formation are you in as if your above the Utica your chance of a well is greatly increased.

  You need not be specific, but it would help if you would throw out some generalities about the lease I assume you have seem. but there are those in here probably located in your area that can give you a better picture of what the pie looks like first.

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Permalink Reply by Ahouse on January 29, 2012 at 5:24am

Great to hear from you Billy.. I ahve many unanswered questions.

Land is located in Perry Township, Lawrence county PA. Well pad has been poured on the Hufnagel Property. Surrounding Landowners have all signed leases except me.

I dont know what shale formation. How would i find that info?

My true concern is my water quality.

 

 

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Permalink Reply by Billy Park Whyde on January 29, 2012 at 6:21am

  Some one will be able to find ya the info in here for sure. The well has a permit more than likely usually the agency in your state that handle minerals has the data base searchable to the public. It would detail out the planned depth (formation) type of well, (Vertical or Horizontal) drilling unit size in acres perhaps even a surveyed plat map. 

  You can talk to your neighbors and they may tell you what they were paid in lease fees and royalty% perhaps even show you a copy of their lease. 

  Here is a question though they have a well planned and you were not part of the plan then why are they wanting you to lease with them? Say if you have 100 acres and they only need say 10 to 20 acres of it do you want to tie up the other 8o acres? see http://gomarcellusshale.com/forum/topics/monopoly-time?xg_source=ac...

 Reply by Billy Park Whyde 2 hours agoDelete

 Hold on a second here you have 100 acres say in a rectangle shaped parcel. They utilize 20 acres of that back side and get a release upon your 80 acres left over and you say "what good is releasing the other 80 back to me? what can anyone do with it? nothing.

  BS you have 80 acres that could allow you to unitize into say a 640 acre drilling unit. now use the GOM calculator throw in your usable 80 acres into a 640 drilling unit and get a well or wells from one pad that produce say even 500 bbls a day.  I used 17% royalty 80 acres in a 640 acres in the drilling unit 500 bbl a day at $100/bbl you get $387,812.50 the first year along with a leae of say even $3,000 /acre bonus $240,000!

  Nothing?

 Reply by Billy Park Whyde 1 hour agoDelete

Now in comparison if your 20 acres is only 20 acres considered into the say 640 acre unit with the same figures I had used on the 80 acres you only get $96,953.13  a big difference!

  Have your water tested now! As with most land owners we have not had our water tested for years anyway I myself am guilty of that, lol. It might not be good to start with! see http://online.wsj.com/article/SB10001424052970204026804577098112387...

 I assume you would be in the Marcellus as a guess in what is termed dry gas. it is a whole different picture than where I am in Ohio looking at Oil/Natural Gas Liquids/ Natural Gas. 

  You will get more input to your question for sure in here. I do believe however you are in a good position to cut a sweet deal as it appears as if they need you, perhaps a lease in the drilling unit was voided and they are short on acres, could be they want to try and create a protection buffer around that well just a couple possibilities. Do not sign until you get your home work done!

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