Recently contatced by land developer in Greene Twp.. Help!!

My wife and I have recently been contacted by a land developer company to sign a gas lease. We own 3 acres of land in Greene Township. Curious, we contacted this developer and a man came  to our home with a contract in hand. It offered $2k/acre and 1/8th royalties as a 7 year lease. We thanked him and said we'd look it over and contact him. We have been trying our best to do as much research as possible before we decide which direction to go in. Can anyone give us some guidance?

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Permalink Reply by Jack Straw on April 16, 2012 at 2:44pm

What State and which County; we have people here from at least four States; and it is possible that there is a Greene Township in each State.

I would suggest that you talk to the owners of the neighboring properties.

The more information that can be shared, the better for all.

Try to find out if your neigbors have likewise been contacted.

If your neighbors are leased, who are they leased with?

What Company or Companies are currently active in drilling in the Marcellus Shale near your 3 acres?

It is likely that the "land developer" are a "Flipper"; They hope to commit you to a lease and then attempt to market it while you are waiting for their check.

They offer you 1/8th Royalty and $2k/acre while they hope to get $4k-$5k an acre and perhaps a 17 1/2% royalty, They profit by the difference (that might have been yours, should you be able to eliminate this Middleman) - and they collect a 5% over riding royalty interest (that might have been yours, should you be able to eliminate this Middleman). 

Good Luck.

 

All IMHO,

                 JS

Permalink Reply by Ryan on April 17, 2012 at 12:49am

We are in Ohio- Mahoning County. There have been some residents in Mahoning County that have signed with Chesapeake, but nobody close to our land (that we know of). Our neighbors have also been contacted by the same man and have not signed yet, don't know about other neighbors just yet.

Permalink Reply by Mike h on April 17, 2012 at 3:17am

Form a landowners group with your neighbors.

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