Property value question.

I was wondering what happened to property values in NY after the tracking ban. My first goggle search brought up Fracking reduces property value.
Now let me get this straight I own only 70 acres I bought in 1975 for $34,000. I live in eastern Ohio and could possibly lease for say $3,500 a acre which = $245,000 and I still own the land. Say I am part of a 640 acre well unit and the well comes in at say 1,500 barrels a day and my royalty is say 16.5%, according to royalty calculators in oil alone I would get $955,040 for a year for oil.
So with Fracking what is my property worth ? Without Fracking what would the property be worth? Speculation come to play but a crack at over $1,000,000 in a year would certainly increase my property worth! Note even non reclaimed strip mine land considered as useless has value now!
What would be nice is to have a real estate broker throw their two cents worth in here. I for one believe buying property of any size is a thing of the past.

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Permalink Reply by Jim Litwinowicz on December 13, 2011 at 8:28am

Property values have gone way up in W Pa where the boom has boomed. Land is now hard to find that is being sold with all rights.  Much land can be bought with the rights not transferred with the sale. This land is being sold for roughly the same price before the boom.

One thing I would caution any buyers of land that is already leased is to study the existing lease very carefully, even if the rights do not transfer with the surface ownership.  If the lease is a standard lease written by the O&G company with out the proper addendum can lead to many problems when the drilling starts. You may end up with regional ponds, compressor stations, multiple pipelines and more.

People that have signed a landowner unfriendly lease may have damaged the value of the property even if the rights transfer with the surface. As people become more aware of the potential problems in a bad lease they will less likely buy land under such a lease.

Permalink Reply by TFP on December 13, 2011 at 12:39pm

I have been looking in W. PA and E. Ohio at land in large acres.  You cant really find anything with all mineral rights and no current leases.  You can find some large acres but they are signed up with a current lease or dont own the mineral rights.

Permalink Reply by George Brown on December 13, 2011 at 12:39pm

It's a trade off, right?  Yes, perhaps the surface has become less valuable but the increased sub-surface value more than makes up for it.  I'm now leased and one day my surface land might become unsightly.  Maybe I'll lose some timber.  Maybe I'll have to move my honeybees elsewhere.  And for sure, the deer hunting will probably be not as good, possibly even non-existent if a well is drilled. But who cares!  I would be pocketing between $100,000 and $250,000 per year in royalties.  Overall, my quality of life would be vastly improved. 

Permalink Reply by Terry W. on December 13, 2011 at 12:51pm

George"

You would most likely go to the Carribbean and settle down. (Like me)

Buy your own little island...have the island girls take care of you (and your wife)

Dreams can now come true!!

Permalink Reply by George Brown on December 13, 2011 at 1:19pm

I like the way you're thinking...

Permalink Reply by Jim Litwinowicz on December 13, 2011 at 3:22pm

Hey, you guys mind if I dock my yacht on yer island for a day or two?

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