Well Pad Compensation

Hi folks, this is my first post on this enlightening forum.

I am in the early negotiations for a well pad on my farm, and was wondering what a typical compensation would be for that acreage CHK mentioned $2000 / disturbed acre as an average arbitated figure. This is in Carroll county Thanks for your replies

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Permalink Reply by Jim on November 30, 2012 at 10:02am

What State are you in?  Ohio has a Greene County, and oil was found just north of there in Clark County.

Permalink Reply by rmc on November 30, 2012 at 1:27pm
Oh sorry that's Greene County Pa Richill township We leased to AB Resources then they where bought out by Chevron Ummm we signed in 2009 Iam sure you couldn't get those terms here now.
Permalink Reply by Finnbear on November 30, 2012 at 1:30pm

In another county south of you where some really great wells just had results posted, some people signed for $30k for the pad site (up to 5ac) and $8k/disturbed acre beyond that.

You need to take into consideration what the land is worth to you over time. Do you normally grow crops on those acres, grow trees (lumber, Christmas trees, other forest products), hunt, camp, hike, etc.? Essentially, those acres used for well infrastructure are gone for the life of the well(s) but you are still paying taxes on them as before the drilling (and maybe higher taxes when the county auditors get together and realize the value of the hydrocarbons being extracted). What are you willing to give up those acres for? If farmland and the crops grown there are required for feed for your livestock, how much will you have to pay to buy the feed you can no longer grow? Take that amount per year and multiply times the number of years the well might still be there (20, 30, 50 years?) and you'll get a good start for valuation.

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