Replies to This Discussion

Permalink Reply by Erin Carpenter on April 1, 2011 at 9:16am

I found this link....it might be helpful

 

http://geology.com/articles/mineral-rights.shtml

Permalink Reply by Barbara on April 1, 2011 at 9:59am

THANK YOU!!!!!!!  i too easily forget to check this site and it is a good one....has a ton more info than it used to, also. 

'mineral rights' then is the whole shebang..........everything below the surface. the sale CAN be limited to only certain levels of the subsurface, so one could limit it to only marcellus, for instance, but not utica.  hmmmmm all these things i didn't know when i could have done something abou it...........so it goes.

Permalink Reply by Frank Walker on April 1, 2011 at 10:51am

Agreed.  Right or wrong that's exactly what I did.

 

The Utica today is very much an unproven play.  In thinking about it, I decided it was not worth very much . . not yet.  I wanted to be fair with the gas company, so rather than ask some outlandish sum for my Utica I decided to assume the risk myself instead of leasing it.

 

It's a roll of the dice.  The Utica simply might not have value where I live.  In that case I will lose my bet and have to swallow my loss.  OTOH, if the Utica does turn out to be valuable I plan to lease it based on its full value.  And I don't anticipate leasing it any time soon, if ever.  It will take years, I believe, before we know whether the Utica is prospective.

 

One final thing:

 

By hanging onto my Utica I also automagically was able to keep everything below the Marcellus.  I have no clue what they might find down there in thirty years.  In the Gulf of Mexico they hit oil seven miles down.  So even if the Utica bombs, I still might have a chance to come out OK.

 

I did lease my Marcellus and everything closer to the surface along with it.  I hope they hit it big and make me rich.  But leasing everything from the surface down to the center of the earth never seemed to me like a smart idea.  Who knows what riches might be down there . . or not.  I sure don't know.  How could I price something like that fairly?  Better to retain possession of the unknowable depths and take my chances.

Permalink Reply by NY Gas Rights on September 5, 2011 at 3:22pm

You gained nothing from "withholding" anything below the Onondaga Horizon. The facts are the gas companies will be paying royalties at the level your contract states and it would stay that way regardless of the formation drilled. The Utica will be more expensive to drill and the legal work- because of the rules in the Gas Conservation Act - may cause the companies to lower their royalty offers if your contract is ONLY for the Utica. A current contract with a good royalty rate would apply to all hydrocarbons recovered regardless of formation drilled.

Permalink Reply by melissa humphrey on April 10, 2012 at 9:30am

Re reference to  Utica potential early in this thread.

If you want to size up Utica potential, I suggest google / 2009 USGS, maturity in the devonian and Octavian syudy (can't spell it), strata.

Key is hone in on maturity. General rule of thumb is 3-3.5 is max limit for middle devonian RO and  and CAI index is 4-4.5 MAX. Otherwise it is over cooked.

If you want Utica buy land where the readings are at or under those #s.

Melissa

Permalink Reply by NY Gas Rights on October 24, 2011 at 4:17am

This article is absolutely WRONG. "Mineral rights also
include the rights to any oil and natural gas that exist beneath a
property." is not true in Pennsylvania and most states in America. Completely reckless of the author to not research the laws.  PA law is quite clear that Oil and Gas is NOT a mineral and must be stated specifically to retain or transfer those rights. If NO Mention is made of Oil and Gas in a deed transferring Mineral Rights then the Oil and Gas is retained by the seller. 

Permalink Reply by MJM on March 26, 2011 at 8:11am

Bradford county production keeps increasing and is in the beginning stages of development. Keep your mineral rights unless you need the money now. Between the Marcellus & Utica and taking into account bunkbedding wells, there is a huge potential in the ground here!

If we get a national energy policy that focuses in on our natural gas, you will see demand increase, price increase, and royalty checks increase over time.

I believe all estimates are conservative at this time due to the immaturity of the play.

Permalink Reply by Barbara on March 26, 2011 at 12:55pm

Recently I was told that since the Chesapeake leases typically pay royalties AFTER all production costs, this includes the landowner paying, as a 'production cost', any severance tax/fee imposed by the state.  This surely creates a catch 22 for landowners.

 

Many companys do NOT pay the after-production rate, however, but the royalty is on the amount of gas produced.  This would make a HUGE difference in value of the lease/mineral rights between these leases and the Chesapeake type. 

 

Have I understood this correctly?

Permalink Reply by Pam S on March 26, 2011 at 2:33pm

I believe you are correct in that some companies will only pay royalties after they have deducted their costs to produce the gas. I'm not sure how most companies do it. My lease says:

“Royalty”, “Royalty Interest”, “Lessor’s Royalty” or “Royalty Share,” wherever used herein, shall mean twenty percent (20%) of one hundred percent (100%) of the Sales Price of all Oil and Gas produced, saved or sold from a Well on the Leased Premises or a Unit in which a portion of the Leased Premises is located. The Sales Price for the Oil and Gas shall be determined at the Wellhead, adjusted for BTU content, without deductions for, gathering, separation, transportation, marketing, compression, dehydration, line loss, Production Taxes of whatever type and kind, compression fuel, pumping costs or other costs of the Lessee, of whatever type or kind, associated with the

production of the Oil and Gas."

If I am reading this correctly, they cannot take deductions that you mentioned in your post. (Hopefully I'm reading it correctly!! If I'm not, can someone please let me know).

I originally leased with fortuna but chesapeake took over the lease with the same terms. I don't know if I would have gotten this same provision had I originally leased with chesapeake.

Permalink Reply by Barbara on March 26, 2011 at 2:53pm

yup....that looks great.  i doubt you would have gotten it from Chesapeake if that was the original company..............and 20% plus your per acre...................you have a really sweet deal.  you must be on top of the mother load and they really need you!!!!  good for you.......you have the best lease i have heard of.....enjoy

Permalink Reply by Pam S on March 27, 2011 at 1:31am

Thanks, It is actually the "Friendsville" lease. I found the lease on the web, did some research into who the lawyer was that negotiated it and then used him for my lease. If you google it, there is a copy of it on the web. Even though I was not a part of that group, my lawyer convinced fortuna to give me the same terms because it was around the same time period. I did luck out.

Permalink Reply by NY Gas Rights on September 5, 2011 at 3:27pm

Incorrect, Barb..  Your contract states that you share the production costs by the rate your royalty amount states . You can never NOT be paid and you are NOT delayed in your payment.

• ‹ Previous
• 1
• 2
• 3
• 4
• 5
• 6
• …
• 12
• Next ›
• Page