Royalty Amounts

Can anyone give me a general idea as to what amounts landowners are receiving in royalty payments per month in Butler County, PA, especially in Center, Conoquenessing, & Butler Twps.?

I'm contemplating selling my property (approx. 60 acres) but retaining the gas & oil rights.  Has anyone sold their property this way in the same areas?

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Permalink Reply by Dexter Green on July 24, 2015 at 2:18pm

You'll find that selling land without mineral rights is more challenging now than it has ever been.  Your best bet is to find large farmers or land buyers in the area and go directly to them first, before listing it.  Usually they have a formula for how they price farm land and they can take into account land without minerals.  

Permalink Reply by CJ on July 24, 2015 at 2:31pm

Actually I'm auctioning my property instead of listing it, and am trying to decide whether to retain the mineral rights or not. (We've sold farms this way before and they go quite well Tough decision to make --

Permalink Reply by Dexter Green on July 24, 2015 at 2:36pm

An auction is the smart way to go if you want to keep your minerals.  I'd say that if you have a long enough timeline then yeah, keep the mineral rights.  If you're looking at retirement in the next 5-10 years then take the money and invest it wisely.  Butler county is dominated by Rex Energy, and they've cut their capex dramatically.  They're in survival mode.  All the shale drillers are.  So if you don't mind waiting out this cycle then by all means keep your rights.  

Permalink Reply by G.H. on July 28, 2015 at 8:58am

Retaining a portion of the minerals is always an option to entice buyers who would not consider it without the oil and gas.  Maybe sell it with 50% of the o&g, retain 50%.

Permalink Reply by Rich on July 25, 2015 at 6:40am
CJ
Here in w.lawerence co property close to the Patterson well was sold for about 3200 an acre without mineral rights. If that helps
Permalink Reply by Philip Thackray on July 25, 2015 at 8:17am

In March of 2015 I was offered $5000.00 / acre for 100% of the gas and oil rights by First Land Services, LLC (724 540 3013 Cranberry TWP, PA).  This acreage is in Forward Township, Butler County, PA.  All the acreage is leased to either XTO or Rex.

There are of course formal ways of determining the present value of an income stream using the Internal Rate of Return (IRR) function but that requires an accurate estimate of the future cash stream and for a wet gas well that requires an accurate decline curve, commodity prices out 20 years, what typical deductions will be, what new tax might be imposed, (etc., etc.) and what IRR you want on your investment.  So it is just about impossible to value mineral rights at this time.

Is your land leased?  Are you near existing Rex or XTO production units?

I also agree with everything Dexter said.

Phil

Permalink Reply by CJ on August 18, 2015 at 7:25am

Appreciate all the info.  My land is leased with Rex.  Property is about 2 miles from 4 wells being drilled by Rex, and about 1 mile from an XTO drilling site.  However, 15 residents of Franklin Twp. have filed a lawsuit against XTO, so it's pretty much on hold now.  My property is in both Franklin and Center Twps. 

The farm that adjoins mine just had an EdgeMarc pipeline put in that crosses Rt. 422. Not sure where it begins, or where it's going to. 

My farm is being auctioned next month.  We decided to offer it both ways -- with mineral rights, and without. 

Permalink Reply by Philip Thackray on August 18, 2015 at 8:55am

Sounds like you are between the XTO Cratty B and Rex Gray well pads.

I believe that pipeline is the EdgeMark Constellation Pipeline.  I think that this is bringing wet gas from EM energy wells in Concord and Allegheny townships to a processing plant.  Probably the MarkWest plant in Jackson Township.  They might be going to the XTO plant in Penn Township. 

I don't know if EdgeMark and EM are related.  They show different business addresses but both South of Pittsburgh.

Good luck with the auction how ever it goes!

Phil

Permalink Reply by CJ on August 18, 2015 at 10:14am

Yes, that's were I am located.  Thanks for the EdgeMarc info. I don't think EdgeMarc and EM are related, but I'm not positive.

Thanks for the good wishes!  Sure need that!

Permalink Reply by Jeff Kerr on July 27, 2015 at 11:41am

the price of gas is so low we got 1.11 per mmcf in sw pa  Rice is the driller would not even but grocerys

 

Permalink Reply by KAS on July 28, 2015 at 2:45am

Was that before any deductions Jeff?  We are with Rice also and just got our division orders and are hoping to see the first check in September.  I am always looking at the price at the top of the page to do some rough calculations.  I was underestimating below that-- but not by that much lol-- your amount is less than half that?  

Permalink Reply by Jeff Kerr on July 28, 2015 at 8:26am

they pay us well head price all they got for it was 1,11 per mmcf. they took out 46 % for deductions. 57.96 in deductions and we got 69.50  that is not good. price at the top of page is what the last sale was not what we get. its sold several times be fore it gets to henry hub. as I understand. Chesp. had the lease and sold it to rice. Chesp. was paying us for oil and LNG AND AS SOON AS RICE TOOK IT OVER THEY SAY ITS A DRY WELL.  I do not think Chesp. would pay us if it was not producing oil or LNG. but rice said we must have got a some one elses % of there oil and LGN lol.Its a joke. where is your prop. at in PA. WE ARE GREENE CO  Spring hill TWP. i SURE HOPE YOU HAD Atty  LOOK OVER YOUR LEASE as we were naive when we signed what a mistake that was. I still feel our well is producing some oil and LNG but not sure how to find out. this pc stuff is all new to me. All I can say is watch your backs with any driller. there all crooked  

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