What is a fair price for a signing bonus in Washington County?

EQT has offer a lease @16% and $3,500 per acre signing bonus.

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Permalink Reply by rmc on November 11, 2014 at 10:01am
Wasn't to long ago I believe Rice energy was offering north of 6 thousand an acre and 18 percent royalty. That's in Washington Pa
Permalink Reply by James T Monyak on November 11, 2014 at 10:08am

This is in Finleyville near Trax Farms on the border of Allegheny County.

Permalink Reply by Gas Boy on November 11, 2014 at 1:39pm

Probably best to take the offer.  EQT is THE game in that area, and they are active. 

Permalink Reply by Adam Martin on November 12, 2014 at 1:52am
What strata does this include, just Marcellus or all including Utica? I would also insist that they remove all production costs or enhancement clauses. The terms that you've mentioned above don't sound too bad but you should be starting at 5k per acre, 18% and no production / enhancement costs. In most cases, production costs will cost you 15 to 20% of your royalty and that doesn't include the nearly 40% that will be sent to the tax man... And always best to have O&G attorney look over the lease before you sign.
Permalink Reply by Puzzled on November 12, 2014 at 7:58am

will they remove the enhancement clause because everyone I have spoken are of the opinion that no one will do a lease with no enhancement clause

Permalink Reply by bo boboski on November 12, 2014 at 10:18am

I really believe that the O&G co.s have done all the calculations,figured up what it cost them to lease/build pads/drill/frack/process/transport,etc.etc. and in all the calc's they figure on paying 12.5 % royalties,either by HBP deals,or by being able to deduct all these costs from the landowner . whether it's in the lease or not. All their bottom dollar ,in the page  figures. that they want to show their investors depend on them not paying any more than 12.5 % royalties. So whether you have an old HBP 12.5 % lease ,or a newer 18% lease, in the end, it will probably in up only 12.5%. Or there abouts.

Permalink Reply by D Gates on November 14, 2014 at 6:02am

Rice is paying $6K/acre & 18%.

Range is Close to that.  Depends on location & acreage.

Permalink Reply by James T Monyak on November 14, 2014 at 10:26am

Just finished my phone conversation with EQT.  Asked them for $4k per acre and no deductions and they told me they would let me know in a couple of weeks. 

Permalink Reply by Adam Martin on November 14, 2014 at 11:53am
Good luck James, I hope they go for no deductions. Watch if they agree to no deductions but put any enhancement clause in the lease. Enhancement is basically the same thing but different language so be on the lookout. 4k per is not bad for EQT, are they still at 16% royalty or are you asking for more?
Permalink Reply by James T Monyak on November 15, 2014 at 6:07am

Thank you,  I didn't talk about the 16% since I am asking for no deductions.  I would go for 14% if they do no deductions.  One does not have any control on the deductions and it's very upsetting to see them come out of your monthly check.

Permalink Reply by S S C on November 18, 2014 at 2:59am
Be aware that the gas company people read these discussions and take notes. If you dont want them to read your mind your best bet for private thoughts is a pm. But just because you say something here does not mean you have to agree to it in a contract. You know how landmen are, they will try to make you think you do. I think the best concept to have in mind is 'going rate' as opposed to 'fair'. They will try to use your amiability against you and your family. Been down the road with these landmen several times. Good luck.
Permalink Reply by James T Monyak on November 18, 2014 at 7:28am

I am well aware that Landman can read.  I would even consider a couple of them as my friends.  I don't communicate anything on this web site that I didn't already tell the Landman over the phone.  I am honest person and tell it the way it is.  This is a business transaction and both parties will sign if they both benefit from the contact.  With that said, the going rate is important and this web site can provide that information since signing bonus are not recorded in the court house.

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