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 Jim Litwinowicz on April 24, 2013 at 2:39pm

Glenn, can you tell from the ROWs granted just where the line runs? Can you follow the parcels/owners?  See my comment to Lance to understand why I ask.

Permalink Reply by Lance Nimmo on April 25, 2013 at 3:04am

I saw the illustration, it runs directly south pretty much. Crosses over 422, then shaffer rd. heading towards ellwood...

Permalink Reply by Jim Litwinowicz on April 25, 2013 at 3:15am

How far north doe sit go?  Or east.  I was told it runs north of the boy scout camp.  Way too far north to run to Butler.  I think it is for northern Law, Butler, and even Mercer counties.  Maybe into Venango or Clarion. Means wet gas.

Permalink Reply by Lance Nimmo on April 25, 2013 at 3:53am

Jim, I could only see the section of the line that the landman was responsible for leasing at the time. My tract was the nothernmost on his plot...

Permalink Reply by Trapper on April 25, 2013 at 6:44am

Jim,

A co-worker in North Sewickley Twp. , Beaver County , has signed with Markwest for what I believe is this same line (s). He is situated back behind Riverside High school some where. I am thinking this is the alternate route to bypass troublesome landowners in the Ellwood area lying in Lawrence County.

Glenn

Permalink Reply by Trapper on April 24, 2013 at 3:37pm
Jim,
I don't know. I do know that me and some neighbors signed with markwest last summer and were told the same story about connecting the shell cracker with butler. Subsequently I was told route had been changed due to resistance in the Ellwood area. The route changed to northern beaver county. We are in Lawrence about 1.5 mi. from New Galilee. Even though route supposedly changed , the row agreement was still recorded at the courthouse. I am with you on the wet gas idea. I have a feeling this will be bigger than anyone expects!
Sorry Lance to get off topic. I sincerely hope your dad gets treated fairly and comes out of this in good shape. I can't understand the low offer and there's no way I would accept it either ! Good luck.
Glenn
Permalink Reply by Oliver Perry on April 25, 2013 at 1:32am

Lance,

I think it's just a bad time for your dad's lease to come up for renewal. As you know, for whatever reason, things are really slow with Shell in Lawrence & Butler Counties at the present time.

Permalink Reply by Lance Nimmo on April 25, 2013 at 3:02am

Yeah, it's disappointing, but we all have to put our big boy/girl pants on and deal with it I guess...

You know what is really funny is the landman told my dad, "don't worry about the bonus, the money is in the royalties." My dad was like, well you were offering 18.5% no deuctions before, is that on the table? They said no. HAHAHHAHAHA They sling the company line so much, when a land owner actually knows the area around him they have no answer. Unbelievable.

Permalink Reply by Trapper on April 25, 2013 at 4:21am
Are you saying your dads old east lease was 18.5%?
Permalink Reply by Lance Nimmo on April 25, 2013 at 7:11am

No, I'm saying the leases they were offering in 2012 was 18.5% no deductions. His is 12.5%. I'm just saying it's funny a landman telling my dad that the real money is in the royalties, then tell him the previous offer of that is off the table as well.

Permalink Reply by Norm Kozlowski on May 8, 2013 at 5:56pm

The real money is in the royalties, don't know how many acres your dad has but if you figure they are paying out, just say $125 an acre per well and your dad has say 100 acres on one well that is $12500 a month and that is on the low end now multiply that by two wells or three wells or four wells any one on here would take that kind of money and the up front money(consideration money) seems like peanuts.  It seems to me the big picture is not being seen in this situation.  What is not understood here is that once a energy company gets a majority lease hold in a area they can raise or lower the bar as they see fit, Its a business and if they folded to every demand that everyone had they would not be in a position to develop an area into a productive money maker,  seriously look at the numbers for the long haul and be patient this thing will pay off, and if the gas business was not in this region none of these type of opportunities would even present themselves. How often does someone knock on your door and offer you a $1000 an acre for something you can personally do anything with,  there are people all over the country that would snatch this opportunity up with out any thought.   

Permalink Reply by paleface on May 9, 2013 at 12:44am

 And after all that activity the gas company has to find someone to buy the gas.

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