Received a 1500 per acre offer to lease the Utica today. Although I've been out-of-the-loop for a while now on lease offers, that's seems very low. I understand the turbulent market, and the sharp decline in offers and offer amounts (we were offered 4500 last year before the crash). Has anyone else received Utica offers and if so, we're they higher? No need to post the actual numbers if you do not wish to. Thanks!

John

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Sounds low to me. yes, times are bad, but I would stick to last years #. Can I ask what company?

Yes, have been receiving them for about a year now - off and on.  I was also offered 4500 originally and then have had about 4 landmen call in the last year all with lower offers.  They also wanted to change the lease and add deductions/market enhancement.  No way on that.  Actually had one tell me that the company would take it anyways, even if I didn't sign.  I was slightly startled by that statement but I told him they needed to do what they needed to do.

Was it a 5 year paid up lease at 4500/acre that they were offering or was it 1500/acre paid yearly until production started?

Just wondering if any of you would be willing to share which O&G company and the land broker (company the land man works for).

It would be nice to know the disreputable players.

As for the $1,500 offer - it's a bit low but and the company will offer more if pushed. But it won't be much more. It may be worth waiting until next year until things pick up again.

As for taking it anyway - these companies always make it seem that it's easily done, not so. If your requests are reasonable the company would rather deal with you.

Hi Barry,

I just want to be clear that I do not believe Rice had anything to do with what the landman said.  From what I have heard, the landman's company is contracted by the O&G company and they probably receive some type of commission for getting leases signed (although I have absolutely no idea how it actually works).  Personally, I think it was a scare tactic to get me to sign but not instigated by the O&G company itself.  A company can only do so much in training its people on what to say and how to act/respond to situations but it cannot control what comes out of their mouths.  Out of the 7 landmen I have spoken with over the years he was the only one to throw that out there.  And to be fair, his concept was correct but the intent and the way it was stated seemed to me to be a scare tactic (Law of Capture). 

I don't remember which company the landman was from. 

Personally I have never had any issues with Rice.  If I call with a question someone has always answered the phone and had gotten back to me in a reasonable amount of time.  They are extremely thorough, which can be annoying because it takes so much time, but I am ok with it as I am a detail person.

Which company ? I'd be more concerned with the terms of the lease as the last offer we had on the Utica in Greene county included market enchamant clause.

just curious if you took the market enhancement? 

No
Tug hill was leasing in Greene county I believe spring of 2015 but have since withdrew any offers that I know of.
All of the offers we have received lately are poor and terms are awful we will simply wait for the markets to improve or simply leave it in the ground.
Just remeber if my memory serves me correctly we have the highest producing shale well of 2015 in Greene county

This is how I feel too.  Wait for market improvement or leave it in the ground.  I am ok with both.

the 4500 was from Rice (offered in early 2015) and would have been a paid up lease. The recent 1500 offer from EQT and was also a paid up lease. I'm inclined to wait until prices rise. Although a calculated risk, it seems the potential is too high to jump into something quickly. JB.  

Can I ask why you did not take Rices $4500 last year? Is that offer from Rice still good? I agree with Educate Me, so far we have been able to come to agreements with Rice on several things. BUT, can be long and tedious. Having said that, we also are detail oriented, and getting things right from the beginning is best for both parties.
In hindsight, we should have. There are two other heirs who own the property with me, and the thinking was to complete the Marcellus lease, then move forward with the Utica. In the time it took to complete the Marcellus lease (Rice is indeed very detailed oriented), the market collapsed. Again, hindsight is 20/20. JB

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