Signing with Big companies vs. Small independants.... food for thought... - GoMarcellusShale.com2024-03-29T12:23:12Zhttps://gomarcellusshale.com/forum/topics/signing-with-big-companies-vs?x=1&id=2274639%3ATopic%3A8363&feed=yes&xn_auth=noWas the big company Range Res…tag:gomarcellusshale.com,2010-07-13:2274639:Comment:358242010-07-13T13:35:37.404ZDon Littlehttps://gomarcellusshale.com/profile/DonLittle
Was the big company Range Resources? If so, who was the landman? I am trying to negotiate with the right now and I am experiencing slow responses and questionable behavior.
Was the big company Range Resources? If so, who was the landman? I am trying to negotiate with the right now and I am experiencing slow responses and questionable behavior. OUR U LEGALLY BOUND NOT TO SA…tag:gomarcellusshale.com,2009-08-04:2274639:Comment:110062009-08-04T12:59:48.575ZROBERT H.DIXON JR.https://gomarcellusshale.com/profile/ROBERTHDIXONJR
OUR U LEGALLY BOUND NOT TO SAY WHICH COMPANIES IM DEALING WITH RANGE RESOURCES WHO HAVE A SIGN UP IN BEAVER COUNTY PA NOT FAR FROM OUR ACREAGE THE FIRST OFFER CAME IN AND IT WAS LOW (so ive been told) AT LEAST AS FAR AS THE BONUS ,DID YOU USE A LAWYER HOW DID YOU DECIDE ON THAT IF YOU DID CCAN YOU BALL PARK YOUR BONUS/percentage
OUR U LEGALLY BOUND NOT TO SAY WHICH COMPANIES IM DEALING WITH RANGE RESOURCES WHO HAVE A SIGN UP IN BEAVER COUNTY PA NOT FAR FROM OUR ACREAGE THE FIRST OFFER CAME IN AND IT WAS LOW (so ive been told) AT LEAST AS FAR AS THE BONUS ,DID YOU USE A LAWYER HOW DID YOU DECIDE ON THAT IF YOU DID CCAN YOU BALL PARK YOUR BONUS/percentage Yep, understood - well you fi…tag:gomarcellusshale.com,2009-07-23:2274639:Comment:106772009-07-23T21:55:13.405Zroy joneshttps://gomarcellusshale.com/profile/royjones
Yep, understood - well you figure one day these people would stop being clueless about the industry when theyre planning their future. It's not their fault theyre clueless at first - after all, this should be new to most people, and thats why I try to educate people who actually want to learn. I'm clueless about a ton of things, but I'm not planning my future around those endeavors. Good point though.
Yep, understood - well you figure one day these people would stop being clueless about the industry when theyre planning their future. It's not their fault theyre clueless at first - after all, this should be new to most people, and thats why I try to educate people who actually want to learn. I'm clueless about a ton of things, but I'm not planning my future around those endeavors. Good point though. You are correct Roy...just wa…tag:gomarcellusshale.com,2009-07-23:2274639:Comment:106562009-07-23T12:34:44.103ZMmmarkkkhttps://gomarcellusshale.com/profile/Mmmarkkk
You are correct Roy...just wanted to make sure folks don't get the wrong impression. You'd be surprised at what some of our royalty owners believe!<br />
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And in terms of the rate "flattening out" after year 5, you are very correct. However, that flattened out rate will be but a pittance of what it was in year 1. A well that comes on at 2500 MCF/day at the beginning will end up producing about 700 MCF/day at the end of year 2 and then level out to about 2-300 MCF/day in year 5 and produce with a 5-8%…
You are correct Roy...just wanted to make sure folks don't get the wrong impression. You'd be surprised at what some of our royalty owners believe!<br />
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And in terms of the rate "flattening out" after year 5, you are very correct. However, that flattened out rate will be but a pittance of what it was in year 1. A well that comes on at 2500 MCF/day at the beginning will end up producing about 700 MCF/day at the end of year 2 and then level out to about 2-300 MCF/day in year 5 and produce with a 5-8% decline for a long time. I have seen people make very bad decisions when they saw that first 3-6 months of royalty checks rolling in, only to have the checks decline by a factor of 10 over the next 3-4 years, and then they sit all dejected! That's the key issue I was bringing up! Okay. Obviously I don't mean…tag:gomarcellusshale.com,2009-07-23:2274639:Comment:106542009-07-23T07:19:39.476Zroy joneshttps://gomarcellusshale.com/profile/royjones
Okay. Obviously I don't mean they will be steady as in the same amount for the life of the well. But consistently coming on a monthly basis, yes. After a year of production these wells will level out - but there wont be much decline over the next 20-40 years, Your payments will be less than that first year, of course, but after that your checks will be steady timewise (monthly checks) and now steady in dollars. Check out the typical decline curves of thesse shale gas wells - that curve will…
Okay. Obviously I don't mean they will be steady as in the same amount for the life of the well. But consistently coming on a monthly basis, yes. After a year of production these wells will level out - but there wont be much decline over the next 20-40 years, Your payments will be less than that first year, of course, but after that your checks will be steady timewise (monthly checks) and now steady in dollars. Check out the typical decline curves of thesse shale gas wells - that curve will determine your royalty payment amount. Production will decrease less than 2% every year after year 5. You can take into account prices, but lets be serious here - the demand for gas isnt going anywhere but up over the longrun. Any company that tells you th…tag:gomarcellusshale.com,2009-07-23:2274639:Comment:106512009-07-23T01:00:47.987ZWilliam Kolovichhttps://gomarcellusshale.com/profile/WilliamKolovich
Any company that tells you that your royalty checks will be steady for the next 20 years is really sticking their neck out. I 'm not sure the company would put that in writing. Would you?
Any company that tells you that your royalty checks will be steady for the next 20 years is really sticking their neck out. I 'm not sure the company would put that in writing. Would you? In a lot of these areas, infr…tag:gomarcellusshale.com,2009-07-22:2274639:Comment:106482009-07-22T21:36:43.877ZCraighttps://gomarcellusshale.com/profile/Craig577
In a lot of these areas, infrastructure is a problem - the drilling companies have to have a way of getting the gas out - personally we have been trying to get a small pipeline in for over 18 months, and still can't get past the permitting for the state keeps changing the rules on us mid-stream. Now, 18 months later, we haven't even broken ground, and if it is 3 year lease, we have to quit trying, for there is no way to get the pipe in the ground, the well drilled and completed int he remaining…
In a lot of these areas, infrastructure is a problem - the drilling companies have to have a way of getting the gas out - personally we have been trying to get a small pipeline in for over 18 months, and still can't get past the permitting for the state keeps changing the rules on us mid-stream. Now, 18 months later, we haven't even broken ground, and if it is 3 year lease, we have to quit trying, for there is no way to get the pipe in the ground, the well drilled and completed int he remaining 18 months, so you will get your three year lease back, but a 7 year lease is worth considerable more to us, and we are more willing to allow addendums, for we know we have time to work around it - all the true drilling/exploration companies are anxious to get into the field and drill, but many of the areas do not have the infrastructure in place to do so, so a longer lease period, at least until infrastructure is in place, will likely put you in the front runnig for a well - especially if you look to lease to a smaller company where you can develop a relationship, rather than just a lease number. If you believe that the guy p…tag:gomarcellusshale.com,2009-07-22:2274639:Comment:106462009-07-22T21:30:49.296ZCraighttps://gomarcellusshale.com/profile/Craig577
If you believe that the guy putting together all of the "leasing groups" is just out to help you, then you are sadly mistaken. Read his contract - he gets an override off YOUR OGM's. So what if he can get it up to 15% ot even 20%, he gets half of the amount above what you were originally offered. You can do that on your own. And then he holds all of the technical data from your lease to use as he sees fit - and believe me there are many ways to use that information to make money, and you get no…
If you believe that the guy putting together all of the "leasing groups" is just out to help you, then you are sadly mistaken. Read his contract - he gets an override off YOUR OGM's. So what if he can get it up to 15% ot even 20%, he gets half of the amount above what you were originally offered. You can do that on your own. And then he holds all of the technical data from your lease to use as he sees fit - and believe me there are many ways to use that information to make money, and you get no cut off his using you. I am sure that up around Shinglehouse he swings a wide path, but in real Oil and Gas circles he is a bafoon, and the people signing with him are being taken advantage of. Most independent companies will work with you, even to the point of allowing you to participate in the well, if you so desire.<br />
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If the man really was what he puports himself to be, then he would be more above board with you all, and not have to be such a sales pony. Also, his enjoyment of a state posititon in which he negotiates contracts for state owned lands is an advantage to you, for sure, but is seen as a conflict of interest by most of us who have been drilling in the area for years before the rest of the country caught up.<br />
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Oops, did the animosity show through? Anyway, the smaller companies, who were doing the drilling before the bigger companies came in are now being priced out, but are much more likely to give a drilling commitment. In fact, I persanlly have signed over 1800 acres with drilling commitments - if we don't drill by a certain timeframe, you either get the land released from the contract, or a large payment and allow us to try again to meet a new commitment. The larger companies won't do that, and there are plenty of smaller companies in your area that will not deal with the man. "...and they say the royalty…tag:gomarcellusshale.com,2009-07-16:2274639:Comment:104222009-07-16T12:23:50.095ZMmmarkkkhttps://gomarcellusshale.com/profile/Mmmarkkk
"...and they say the royalty checks will be steady for the next 20 years."<br />
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I would be very careful with a statement like this!! Shale gas wells experience very high declines in the first months/year of production. So your royalty check could come in very high for the first few months and then decline rapidly and then eventually level out a a much lower rate. In the Barnett Shale, for instance, wells come on at 5 MMCF/day but by year 2 or 3, are down to less than 1 MMCF/day. So don't expect…
"...and they say the royalty checks will be steady for the next 20 years."<br />
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I would be very careful with a statement like this!! Shale gas wells experience very high declines in the first months/year of production. So your royalty check could come in very high for the first few months and then decline rapidly and then eventually level out a a much lower rate. In the Barnett Shale, for instance, wells come on at 5 MMCF/day but by year 2 or 3, are down to less than 1 MMCF/day. So don't expect your royalty check to be "steady for the next 20 years" at those rates. Now maybe they meant the checks would arrive steadily...keep coming each month. That is probably true. But the value of the checks will be much smaller.<br />
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And the check amount is also highly dependent on gas prices. So the volume of the royalty could decrease but if prices increase, then maybe the check stays the same. Or if prices drop in half, you check could go down a whole lot.<br />
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Bottom line: after that first royalty check comes in, DO NOT START MAKING FINANCIAL PLANS BASED ON THE SIZE OF THAT CHECK! Future checks will vary considerably! Don't quit your job and assume they'll be paying you big bucks for 20 years!!! makes perfect sense.thanks fo…tag:gomarcellusshale.com,2009-07-15:2274639:Comment:103732009-07-15T01:12:09.687ZF. Emmett Kearney 111https://gomarcellusshale.com/profile/FEmmettKearney111
makes perfect sense.thanks for the insight. EK
makes perfect sense.thanks for the insight. EK