Shell drops the floor out of Lease Offer

My dad has a lease run out in June, and he had a landman stop yesterday. Apparently, they are offering $1,000 per acre.. LMFAO

 

Does Shell really think the landowners that signed the original BS leases are gonna come out and sign for that after their neighbors just signed for $3,250 6 months ago? I know, I know, it's the old they don't have competition. Tell you what, add up the acreage of all the old leases coming due, along with current holdouts, and they just found competiton. I really hope that landowners, without LAWYERS can keep communication lines open and not settle for BS lowball offers....

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Permalink Reply by Lance Nimmo on May 9, 2013 at 2:03am

Paleface, I don't think the O&G companies have a hard time finding customers, so I wouldn't feel to sorry for them.... 

 

Permalink Reply by Lance Nimmo on May 9, 2013 at 2:03am

I understand where you are coming from. Like I said, my father did not hold out. he actually signed for less 5 years ago. The point is the people held by the older leases had to sit there and watch people with .62 acres get $3,250 an acre. And how do these companies show loyalty to the folks that were the first ones to sign with them? Drop the offer by over a third. People keep talking how the money is in the royalties, and that's fine. They dropped the bottom out of those too. I'm not looking for a pity party. I am trying to make the other landowners in my area aware that others are in the same situation, and as their leases start to expire they'll have people in the same shoes as them to network with. Lawrence County is not Lycomming or Washington County. We barely have ANY well activity and none planned for 2013.  A lot of old leases are on the clock.

Permalink Reply by p umpjack on May 9, 2013 at 2:13am

unfortunatly shell has a bully pulpit now

 sometimes you have to play the hand your dealt or fold......

Permalink Reply by Trapper on May 9, 2013 at 9:55am

As of 5/7/13 , Swepi has recorded 51 memo of right of way and memo of right of way options for Slippery Rock Twp. alone. Something is in the works there.

How close to you are these leases nearing expiration?

Permalink Reply by p umpjack on May 9, 2013 at 3:32pm

glenn-lawrence co or butler co slippery twp

swepi has one flaring on harmony rd slippery rk butler only one vertical and one horiz and another one set to flair 2 miles north one vertical and 4 horiz, they are doing seismic shots today 2 miles above the resting well  near the strip cut close to harrisville I  am thinkin rockin the cemetary today rest well veterans intered there

Permalink Reply by Mike Sero on May 11, 2013 at 9:57am

Norm, your math is only right if all 100 acres are in a unit. You can not predict what anyone will have. A 640 acre unit can hold 3000 or more acres sometimes.

Permalink Reply by Norm Kozlowski on May 13, 2013 at 4:01pm

Mike, I don't follow your math a 640 acre unit is a 640 acre unit, not sure where the 3000 acre comes in.  I need more info on how you get to the 3000 acre number, unless you are including acreage that is not fully in the unit but is held by production, which would not count because those acres are not paid on until they are in a unit themselves.

 

Permalink Reply by Mike Sero on May 13, 2013 at 4:19pm

I was responding, on that you are assuming all 100 acres are in the actually unit. In your above response.

And you are correct on what I was saying - typically when a unit is formed - the drilling company makes it so it holds as many acres as possible.

I know of many who will probably make/made more on the bonus paid then they will in the royalties in the immediate future - look at many of the dry gas counties in PA.

It's in all honesty a crap shoot no matter where, who or what goes on.

Permalink Reply by Norm Kozlowski on May 13, 2013 at 4:58pm

agreed

Permalink Reply by Trapper on May 9, 2013 at 3:03am
Absolutely pumpjack. I signed in 2006 for 50.00/acre and thought I was in high cotton! This was great lakes who was bought by range soon after. Luckily shell came along when this lease expired and offered 3000 and 15%! WOW the cotton got even higher! A month later shell was paying 3250 and 18%. Oh well I am still happy and just accept the hand I was dealt. Royalties are where it's at anyhow.
Permalink Reply by Lance Nimmo on May 9, 2013 at 3:58am

A difference of $250 is a little different than $2,250.  I see what you're saying though...

Permalink Reply by Trapper on May 9, 2013 at 4:10pm
Pumpjack: Lawrence County.
I have relatives buried in Slippery Rock cemetery , some of whom are veterans.R.I.P.

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