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 April 24, 2013 at 10:25am

I'm not sure a full landowner's group is what I'm going for. I just want people to know that there are others like them who don't want to settle for corporate America's crumbs. Thanks for the luck as well.

Permalink Reply by Jesse V. on April 24, 2013 at 10:49am

You don't need a full landowner group. Just a group around you that are all seeking to be treated fairly. The key is to force Shell or anyone else to negotiate. It is a tough process to find out who is leased and who is not and when current leases are due to expire. The gas companies pay contractors a lot of money to scour the courthouse records and tax parcel numbers and I'm sure they have a system in place that makes them aware if they are about to lose by expiration a nice chunk of acreage in any certain area. I know that from time to time competing companies will do lease checks to see if there is an area that is not developed that could be expiring and could be of interest for development. 

As always though any lease and OGM's are only worth what someone is willing to pay. Your lease by itself is not enticing enough. If you can get on the same page with 700-1000 nearly contiguous acres then you have some leverage.  

Permalink Reply by Lance Nimmo on April 24, 2013 at 12:40pm

i already have slippery Rock Twp. done for expirees this year. On to Scott and Hickory. :) Wait, i should have got a lawyer to do this. LOL!

Permalink Reply by John OBrien, landowner advocate on April 24, 2013 at 9:11pm

Lance,

If you got a whole twp to cooperate I want to hire YOU!  

Permalink Reply by John OBrien, landowner advocate on April 24, 2013 at 11:50am

Lance, "full landowners group"

You need a large enough group, hopefully all the folks in your immediate surrounding area to cooperate with each other.  It kind of depends on the acreage each one has as to how many you need, but more is always better.  If you can get a responsible attorney to serve you as a group you should get a fair rate from him.  No royalty %, and reasonable fee.

I don't know about your county in PA, but the latest here in Ohio got $6250/acre!  And yes, they were a large group.

Don't give in!

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on May 14, 2013 at 6:55am

ktr (keep it 'tight & right), Lance...while there IS sin (strength in numbers) - you need to 'focalize' & ktr (keep it tight & right)...

...ENDEAVOR rules the day! ngu (never give up)

As one light lights another, nor grows less - so nobleness enkindles nobleness.

GBU (God Bless YOU)

Permalink Reply by Trapper on April 24, 2013 at 6:27pm

Lance,

I was just looking at Swepi activity on our County Recorder's site and they appear to be very busy in Slippery Rock Twp. I counted 37 right of way agreements recorded since January of this year. Sounds like more drilling is anticipated? Or are these for gathering lines , etc.? Shell was just assigned more leases from Hilcorp again on 4/04/13 , some of which are in Slippery Rock Twp.. Have you read your father's lease carefully? Since Shell bought out East Resources they are only bound by conditions in that old East lease , I would assume. Does it contain an option to re-lease under the same terms  and conditions for another five years? Is $1,000/acre what your dad got back in '08? This would explain the (nowadays) lowball offer at least.

Permalink Reply by Lance Nimmo on April 24, 2013 at 9:01pm

You raise good questions. In short, the old East leases (like my father's) do not contain the language in today's. (Five and five) They are usually either 10 or five year leases. My father was lucky enough to place one of his parcels in the 5, and 3 others in the 10.... I actually am one of the land owners that signed a ROW agreement in the township. It is the artery from Butler to the cracker plant. At least that's what the landman told me... As for what he got in '08, $75 per acre! 

I still love how the landman sympathizers come on her and bash landowners' ignorance. I was on the back porch when my father was told," you'll probably get some free gas out of this well." They knew full well it was a shale play, and played it off. 

Permalink Reply by John OBrien, landowner advocate on April 24, 2013 at 9:16pm

Lance,

If I had been there when the most recent developer were in my fathers kitchen I would have bashed something other than ignorance if you get my drift.  Unfortunately I am left to try to remedy the situation afterwards, but have found a law here in Ohio that will undo the signature so to speak.  I have had it with landmen, or should I say snakes.  Really, lower than a snakes belly is what most around here are.

Thanks for the posts.  It helps with moral. 

Permalink Reply by Jim Litwinowicz on April 24, 2013 at 9:37pm

Lance; interesting info on pipeline. Looking at a Pa map the line cannot be for a line from Butler to Monaca. Perhaps the line is wells in northern Butler County. And if that is the case, it could indicate a game changer. No need to run the line to Monaca unless they have found wet gas in N Butler Co. Plus dry gas could just go into the line that parallels Rt 388. In fact, the line could be to connect the Mayberry and the wells around Slippery Rock to the proposed cracker plant.  If so, that means there is more wet  gas than we have been told ....great news for all of us.

Permalink Reply by Tim Tarr on April 25, 2013 at 12:19pm

Lance,

  I guess they (East) did offer us the big $$$$ down here in SW Washington county. $250 per.

they got very rude when we said no.

Permalink Reply by Lance Nimmo on April 25, 2013 at 2:10pm

Best decision you ever made turning them down. What, you didn't take the free gas line??? DOH

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