What should I expect, per acre, on a re-lease of my property in Middlebury Center?

We live in Middlebury Center - have 12 acres on a 5-year lease that just expired a week ago. Shell just contacted us today to come out and discuss re-leasing our land. I thought Middlebury Center was a dead zone for re-leases, but I guess not? What would the approximate expectations be, in dollar figures, per acre of re-leased land here?

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Permalink Reply by Tom Brian on July 2, 2013 at 1:26am

Deb, tioga co pa  just below ny state line ......

Permalink Reply by Deb Reynolds on July 4, 2013 at 4:54am

yeah, I live outside Wellsboro! Thanks. 

Permalink Reply by Tom R on July 2, 2013 at 2:13am

Deb, if you click on the little picture to the left of a post it will take you to the poster's profile page. While some have set this to be only viewable by people they have "friended", you can usually see where they are from and what county groups they are members of. Gives a pretty good indication of what areas their posts are likely to be about.

Permalink Reply by Jack Young on July 3, 2013 at 6:57am

Many Shell leases in Tioga County had renewal clauses at $300/acre. When our lease expired recently, we were told initially that Shell wouldn't be renewing anything, but apparently their budget got boosted a little and they decided to go with $300/acre and a 1/8th royalty. After looking at the production reports for nearby wells, we took that - none of Shell's wells in the area have been profitable, and the odds of the price they're paying climbing are pretty slim. Especially not for a 12 acre parcel.

Permalink Reply by Gringo on July 3, 2013 at 8:07am

$300 hundred is not the important #,12.5 is. Fight hard for 15%.Over the life of the wells it will more than make up the difference in bonus payment. Everyone needs to stick together on getting 15%.15% was standard for most of the leases from 08 to present. Lets not go backwards on that. Bonus amounts can go up/down depending on competition in the area, price of gas at present time. All may not agree but Jack Young was smart for understanding his cards, I have seen to many units in production with 10 acre islands owned by people who thought they were smart.

Permalink Reply by Tim Tarr on July 4, 2013 at 2:28am

  I'll also add for that small bonus get a formation specific clause. They probably will not agree to that so tell them more $ for all formations. Also be sure to get no storage and no disposal wells. 

  When your dealing with the big boys about the only thing they will change is $ per. acre and perhaps %.

  Best chance of a good lease is a landowner group in your area. If your lease is expiring I'd bet there are alot of others in your Township also expiring. Watch those public boards at grocery stores and other places in your area. You may have to be willing to wait for a few years to get the best lease. They will get all they can at $300/12.5% before they will up the ante in 2-5 years. The more leases they get on those terms, may offer better terms for the hold-outs.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 4, 2013 at 4:02am

Mike,    Review your lease to see if the same bonus that your primary term was leased for applies. Those O&G companies count on you not knowing what your lease says, then take advantage of you because they can.

Also take your lease to a good lawyer and see what you have. You may be able to terminate it. Eventually someone will pay you a bonus & royalty that's worth what you are giving them. The greedy won't let that money maker sit under your property for eternity just because you want a fair deal. 

Permalink Reply by Billy Park Whyde on July 4, 2013 at 4:36am

There are many landowners that have not leased yet even in what I would call the first go around. It would seem to me those that were lucky enough to get a decent lease bonus during the the first go around would not be in a situation where they would have to settle for anything less than the original. On the other hand if they used that lease bonus wisely they could easily say hey thanks for the coin but the price has now increased.

Permalink Reply by Gringo on July 5, 2013 at 2:59am

OPTION to extend at same terms. Their option not yours.

Permalink Reply by Billy Park Whyde on July 5, 2013 at 5:04pm

Gringo from what I have seen here on GOMS most renewals have a tendency to try and change the lease, in a lot of cases  an attempt is made to extend pooling to 1200 acres. That a landowner can say  no to!

Permalink Reply by Trapper on July 5, 2013 at 4:13am
YOU have the option to tell them to take a long hike........IF you have the nerve.
Permalink Reply by Gringo on July 5, 2013 at 11:44am

If you really wanted them to take a hike you wouldn't be on this site you would be on the GASLAND anti-frack site. The whole idea here is to be developed. You need to know what you have and what the realistic value is, based on facts not dreams. 

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