Rice Energy most recent lease sure has gone downhill!
Has anyone read the latest Rice Energy Lease?
Their shut in fee is pathetic at $15 per acre per year!
I'd not be able to sleep if I tied up my acreage for a measly $15.00 per acre!
Imagine.. instead of them having to renew your lease.. they merely shut you in and are able to hold onto 100 acres for the paltry sum of $1500 per year. Now THATS sure CHEAPER than paying you thousands per acre to renew the lease!
If you sign a contract it's best to be sure to DEMAND at least $150 per acre per year.
Also to specify what constitutes an operating well at fair commercial market value, so as not to receive just a few dollars!
With a cheap shut in fee they'll be able to AFFORD to HOLD Your ACREAGE HOSTAGE for decades.. so Their Grandchildren can reap the Net profits.. after You've paid their operating expenses and Ad Valorem Taxes!
So far I've only seen one { 1 } good and fair lease, and anyone with common sense KNOWS which one I'm talking about.. the Smith-Goshen Lease was fair. All the others pale in comparison, and if you sign the wrong lease you and your heirs will LOSE .. Millions .. of Dollars .. over the lifetime of the well.
Most sign out of desperation and ignorance.
These landmen remind me of carnival hawkers selling snake oil.
And the poor people who sign these cleverly disguised Net Leases.. are so desperate for money they "sell out" .. reminds me of the Bible Story where Esau sold his birthright to Jacob for a bowl of Lentils.
Pathetic.. haven't seen but 1 fair lease in years.
Sure glad I didn't sign with XTO for the mere sum of $1.00 per acre shut in fee!
Sure glad I didn't sign with Chesapeake for the mere sum of $50 per acre shut in fee!
If you sign a bad shut in fee.. you may as well just GIVE them your land and PAY them to steal your GAS and along with that.. your Children's Inheritance.
Good Luck finding an Honest and Fair Lease.
Remember.. it's NOT all about the signing bonus.. and you'll lose if you don't get a GROSS% and have to pay operating costs and ad valorem.
Also.. beware of their Held By Production.. we all need to set a TOTAL LIMIT on Held By Production as to the Amount of $ Money.. and the Total Time Limit.. in a fair way for both parties.
Not looking to make a living off the shut in fee.. but if they're not going to shut me in.. they need to increase the fee to something high enough I'll be at ease enough if it lasts 10 or 20 years.
Otherwise.. may as well just GIVE it all to the oil companies.. and most.. already have, who have signed bad.. leases.. with unscrupulous companies and attorneys who operate land groups who will misinform the people and throw them under the bus.
This game is becoming more crooked and desperate as time goes on.
They remind me of carnival hawkers in sideshows, some stoop to new lows and I think you know who I'm talking about at the meeting at Union Local School in Morristown Ohio last Friday and Saturday.
Compare their leases with the Smith Goshen Lease.. and then.. don't try and tell me they're even in the same ballpark. Money aside.. I'd not sign a bad lease regardless whether it was 5 times the amount normally offered.. cause I know once they start with Royalties.. I'll get it back in two months at most with a good lease at a slightly lesser price.
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Replies to This Discussion
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Permalink Reply by 0i7okn54zwbdo on
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"Not looking to make a living off the shut in fee.. but if they're not going to shut me in.. they need to increase the fee to something high enough I'll be at ease enough if it lasts 10 or 20 years."
What company shuts a well in for 10 or 20 years? That doesn't make an ounce of sense.
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There are wells out West shut in for decades.
Until they finish the pipeline it's hard to say how long a shut in might turn out to be, but either way you look at it $15 per acre/year is poor.
If they aren't going to shut in for extended periods of time, they shouldn't mind paying fair shut in fees.
The lease with Great River wasn't any better, but I'm sure some desperate people decided to sign it.
Either way you get your money, but that's why the signing bonus is so generous.
A generous signing bonus doesn't make a poor lease a smart choice.
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Permalink Reply by Tim Tarr on -
An addendum should take of that:
SHUT IN CLAUSE
If Lessors shut in extends beyond years consecutive or years in the aggregate, the Lease will become null and void.
Probably easier to get that than larger shut-in delay rental fee.
I don't like anything in fixed dollar amounts that could be 5 or more years out. Just think of some of the storage fields or even old gas wells. They have dollar amounts from when that equaled a good days wages.
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"Until they finish the pipeline it's hard to say how long a shut in might turn out to be, but either way you look at it $15 per acre/year is poor."
Oh, I agree that's a poor rate, but if you think a company is going to build a pad, drill six laterals to the tune of $40,000,000+ and then leave them shut in for 20 years then you're not being realistic.
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Best to weigh the good and the bad when signing a lease.
No lease is perfect but I won't let them shut me in for an extended period of time without a substantial and fair shut in fee.
If they can afford $millions,000,000 to drill a well, they can afford to be fair to lessor.
Again only 1 contract I've seen fair to landowner so far.
If you've been around long enough to compare contracts, then you likely know which one I'm referring to.
Anyone is free to sign whatever, but if you're only looking at the signing bonus you may be making the mistake of a lifetime.
The "Market Enhancement" is another way for them to deduct expenses.
If it were otherwise, they'd sign a contract stating we could have our choice of whichever is greater, the market enhanced or the 20% gross of our proportionate share at the wellhead.
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Permalink Reply by Lynn mudder on
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Donna, what are your thoughts on Rice?
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Permalink Reply by lance on
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Does anyone know anything about Shell flipping the acreage they have in Guernsey county. I heard Rice may have acquired some of it. Will whoever gets that acreage be bound to the original lease that we signed with Shell in October 2011? WE signed for $5000.00 and 20% And I was wondering what is the average value of Royalties per acre estimated. I was told an astronomical number that was unbelievable. Like a man with 10 acres getting 40,000 a month! Can that be possible? Lance
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Permalink Reply by Frances K Leek on
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This is just a sample of what Rice sent me to look at. They also offered 6250 20%
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RDD Lease_pdf.pdf, 262 KB
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