Snyder Brothers Marcellus Lease

Has anyone signed a marcullus lease with Synder Brothers? How did you make out? Are they paying the upfront payment fairly quickly ?

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Permalink Reply by Interested Party on October 18, 2010 at 8:53pm
Janice,
There are many and varied situations to consider. Development is and will be slow in the Jefferson, Clarion, Indiana, Armstong areas in regards to drilling -- so getting $$ now might be a great thing before gas companies say "we've signed enough so no more acreage needed for 20 years..." and you get shut out. Similarly the more you ask for on a lease (brought to production, shut-in limitations, etc) the greater likelihood that companies will pass on that specific property and wait on forced pooling if that comes to pass. In this part of the state...there are NOT dozens of companies knocking on doors yet. It is not one simple fit to all situations throughout the marcellus fairway. Holdout landowners might be able to play hardball in SW and NE PA, but not so much in the middle fairway in 2010.
Permalink Reply by Sam Douglass on October 19, 2010 at 10:18pm
All sounds true, but good things come to him who waits. This is the landman's first pass. As the infrastructure moves on it seems better deals can be anticipated. But there will be some who can use cash now and they can not be faulted. The amount of drilling yet to be done is mind boggling. It can not be done all at once and it probably is good that things will stretch our for years.
Permalink Reply by Interested Party on October 19, 2010 at 10:30pm
Did you ever play poker? Drilling here will be "mind boggling" if other shale/limestone reservoirs worldwide are not exploited to the point of mass saturation of natural gas. There has to be a buyer for all of the oil/gas. As I mentioned previously, once gas companies get enough land to tidy their planners over for 10-15 years, why would they go out and lease land they have no need for at the time? If they can't develop quickly enough, companies may secure land on the cheap and hold the land for long term plans or resale, but probably won't pay top dollar until they have rigs to drill and a market to sell it--and they need BOTH.
Permalink Reply by Sam Douglass on October 20, 2010 at 9:53pm
Producers want reserves for the future - as much as they can get their hands on.
Permalink Reply by Sam Douglass on October 19, 2010 at 12:06am
Careful. Marcellus is said to have a steep decline curve [as with other shales]. Half of the production may come in the first two years.

Producers talk of making 70% 80% 100% return on their investment - and these kinds of returns are with prices at $3 to $6 or so an mcf. I do not think anyone believes gas will go back to over $16 per mcf but somewhat higher prices are likely to come when new markets are found for all the gas that is coming on the market at reasonable prices.
Permalink Reply by L. S. Reeger on October 18, 2010 at 6:52pm
An ajoining neighbor of mine was approached by Equitable, his neighbor that owns the rights to gas on another adjoining property to ours was approached by Snyder Brothers since they have a shallow well there. I was told SB only offered something like $50.00/acre. After he talked to them they declined the offer. Equitable tried to tell the first person (the neighbor I talked to they owned the lease on his land, although we both have documented proof they don't since shallow wells have been drilled on all our properties). We are in Armstrong County, there isn't a site for it on Marcellus Shale yet. It's just being analized with the Thumper trucks although there are a few Marcellus now existing.

Personally, I'd be wary of offers. We haven't been approached; but having 13 ajoining properties to our property and owning 185 acres of rights we're waiting. I have to wonder since shallow wells were drilled "who" actually owns the rights to the Marcellus. I do know that I thought I'd did extensive research into leasing and our PA laws before agreeing to add 60 acres to our shallow well lease. I was wrong, don't believe anything that the PA DEP says (maybe they will be different with Marcellus -- don't know). I do know I felt safe when we added and amended the original 1920's lease -- in the end it wasn't what I thought. There were problems and to this day we still have to deal with them.

I understand that Dominion Peoples has a lawsuit going in our area because some company drilled through their gas storage area. My friend (it was their property) is very secretive about it -- can't find anything out from her. I wonder if there aren't issues in the areas that have been drilled in Armstrong County with the shallow wells.
Permalink Reply by PI on October 21, 2010 at 8:08am
I don't think that will be the case. They have to drill to maintain the lease for the distant future. If they drill, they'll have to use it. Most leases are of the 5 or 10 year variety. From everything that I've read, even if you cap a well, after it is fraced you will lose gas. To me it makes no sense for the gas companies to overextend themselves. I really believe that we will see a boom in leasing as soon as they get the infrastructure in place to move the gas, but then I think it's going to get quiet for a while...
Permalink Reply by richard bender on October 21, 2010 at 12:07pm
hey mike is your company interested in land in ligonier township westmoreland county?

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