Replies to This Discussion

Permalink Reply by Finnbear on December 1, 2011 at 9:22am

I'd like to know also. I was unable to attend.

Permalink Reply by Rich M on December 1, 2011 at 10:14pm

I was at Barnesville the other night, not much new info other than lease signing should be starting real soon.  Answered a lot of questions from many first timers.  People seemed to be pretty pleased with offer, glad they didn't push him into landing a deal during the summer when it was pushing 3,500.00 and 17%.  I remember a lot of people going into the meetings pretty frustrated cause their neighbors had already signed.  Unfortanatly, some were not patient enough and jumped ship only to sign for less.

By the way, he is still excepting new landowners whether you have half and acre or 1000 acres. 

Permalink Reply by Finnbear on December 2, 2011 at 8:44am

What are the terms? How much/acre? What royalty %? Gross or Net royalty? Is he taking all of Belmont county?

Permalink Reply by psychosid on December 2, 2011 at 10:39pm

I heard $5100/acre bonus + 20% royalty.....was told someone asked how the royalty is calculated, and he wouldn't explain it in detail.  He's apparently saying it's gross proceeds but the language has been changed to what Chesapeake wants.  I'm guessing that it isn't a True Gross Royalty, so this deal may not be what it seems, if there even is a deal.  I agree, many held out this long waiting on Des, so it did help to that degree.  There still seems to be a lot of landowners still in his group and from what I'm told, a lot are showing up at his meetings.  However, I'm beginning to wander if he even has a lease worked out.  The one he was passing out months ago was copied word for word from ALOV's website.....

Permalink Reply by Finnbear on December 3, 2011 at 10:53am

I wonder why ALOV/Buckeye Mineral Development is getting $5800/20% in Belmont and Des is bringing $5100/20% to his group?

Permalink Reply by Shocked at SHELL on December 3, 2011 at 9:42pm

Soon as Des finds out there is a higher offer he will offer a fictional $6000ac and 25% wake up people!!! This guy has strung everyone along your all beat. Soon as the european market crashes so does this market. And to all the people that thinks there so smart cause we heldout for more money you will get nothing. Goodluck

Permalink Reply by Dan Warfield on December 3, 2011 at 11:27pm

I personally don't see Des as stringing anyone along.  I see him as a representative of a group of landowners who are interested in getting the best deal for their mineral rights.  This is the case for the Smith-Goshen Group as well.  I recognize what they are doing as nothing more than negotiating in good faith with companies who want our properties.  Are we all beat... hmmm, I personally think the landowners who signed too soon are beat, at least to a point.  Would I rather hold out for good terms or am I kicking myself for not signing nine months ago or even a month ago for 5k and 20%...for me, I will hold for better terms any day.  What all the landowners who have not signed yet have to remember... these company men/women who are negotiating for their respective companies do this every day, in different shale plays, in different States, on different Continents, around the world.  I myself always have the option to say yes or no and so do they.  As a landowner, you have to be able to walk away from the deal if you aren't comfortable with it.  If we get "nothing"... so be it.  We will always get something out of the negotiated deal, primarily "knowledge" of what to ask for on the next go around.  As long as I haven't signed anything, I still have that option... those that have signed don't have that luxury.

By the way... whats the rush?  I still don't see any huge infrastructure being developed in Belmont or Monroe County... pipelines... what pipelines?  Western Pennsylvania has pipelines.  So you want a well drilled and have it capped off indefinitely until a pipeline shows up... oh wait, maybe we should burn all the natural gas off to get at the other NGL's?  Thanks, but no thanks. 

You are correct in saying good luck.... we all need luck in any deal we make with these large companies.  Chances are, at the rate that the companies are leasing and drilling, 85% of the landowners in Belmont & Monroe Counties will not see the big royalties in the next five years.  Also, if the European Market crashes completely, your lease signing bonus money won't make any noticable difference... you'll run out of money just like everyone else, maybe just not as fast.

There's lots of investment money out there in this world aimed at the shale plays... don't fall into the trap the companies lay out there for you, i.e. "we're done buying in 1Q 2012", or, "this is the best its going to get", or, "we can't put that in a lease".  They will leave when the investors leave and only then.  A European Market crash will only re-align the investment, not drive it away.

Permalink Reply by Shocked at SHELL on December 4, 2011 at 6:10pm

Dan

If you have done your research you would know that getting royalties is 10 time more lucrative. So signing with the company that your neighbors have may get you drilled one or two years sooner, that really doesn’t help either right Dan? As long as you can say hey im better than you I got more up front! Or maybe let see how long I can keep my neighbors from getting drilled because I don’t need money I have 100's of acres. Let’s look at things past than, the lease market completely crash in the Marcellus shale in 2008 with the housing crash and has not recovered yet. But wait you know best cause you were there? I personally think you should wait for DES to get you 35k acre cause that was the most ever paid in Texas and you have the golden goose egg. Keep screwing your neighbors because you and Des know best!!!!

Permalink Reply by Dan Warfield on December 4, 2011 at 8:08pm

Shocked,

Royalties mean nothing to me if the rest of the lease is bad.  What will royalties get me with dead cows/animals on my property from a lease that doesn't protect my current income/livelihood/water/fencing/liability?  How does it benefit my children or neghboring families if this entire area is ruined by unsafe drilling practices such as hazardous run-off, acid leakage, fuel spills/death?  What good does it do my family or myself to sign a lease that actually has no possible end, even if they don't drill a well or pool me correctly? 

When the landmen first came around to this area earlier this year, I was one of the people who was pretty much on board with their ideas.  I had no research to back anything up in my mind of what may be right or wrong... I saw $$$ written all over this and, like most people, I wanted my share as well.  I knew nothing about any of this and still don't know nearly as much as many people do on this blog/site.  What I did see though was the fact that a company was willing to pay me what I thought was a lot of money "up front" to get me to sign their "best in the world" lease which clearly states that they do not have to drill a well on your property nor are they guaranteeing you any royalties unless you are pooled (thats why the companies call it a PAID UP LEASE... you've been paid up).  After my brief research, my wife's reading of the lease, family and friend's concerns and recommendations, etc. I chose not to include my acreage with this certain company.  That was my choice.  I chose not to follow the rest of the sheep behind the wolf (just my opinion and option). 

So many people think that anyone who is holding out is holding out for more signing bonus money.  I am not holding out for more signing bonus money.  I can't speak for all those un-signed people, but I can speak for myself when I say "bring me a lease on MY terms" and we will work on it together.  If you go to a car dealership and lease a car from them, do you completely read the lease first... do you take it to an attorney for consultation?  Those leases are completly one sided FOR the company.  Well guess what, I feel the table is turned around now and they want MY car (the oil and gas rights) on a lease.  Do I not have the same right as they do to call the shots of what I demand in a lease, which will hold up in court?  Anytime you have to negotiate on their front porch, you will lose.  Bring me a lease that is workable, to the point, has added value, has great potential for drilling, has landowner safeguards, royalty that is above average to the landowner and we will talk.  Bring me anything else and you won't have a chance with my property.

EVERY landowner should stand firm as long as possible... why wouldn't you, unless you don't have your heart, soul, sweat, blood, history, etc. involved.  If your property means nothing to you, by all means go ahead and sign anything you like... just don't expect this lamb to follow your path...EVER.

Also, landowners who have not signed and are in a group, whether Des, Smith-Goshen, others, etc. should not "backseat drive" anything these group heads are doing; you have absolutely no idea what is going on in negotiations between the group heads and the company negotiators.  We should be giving them complete support and PRAYING for their negotiations, their continued patience, and above all, their character and heart for what they are trying to accomplish for ALL of those involved in groups.  Each member should send these leaders a message of your continued support in this process... let them know you care about what they are doing... I pray for our group leader every night... pray that he makes the right decisions for all of us.

All this country needs is to have several coal fired power plants go to a "co-burn" of natural gas and coal.  What does this help... this helps the air, this helps the price of natural gas, this helps with employment and this really helps with the chances of you getting drilled upon.  Otherwise, I see this as all hit or miss until something drastic changes in selling the natural gas.  Also, show me the actual value potential of all the natural gas, NGL's, oil and anything else available to market in the Marcellus, Utica and Point Pleasant formations in southwestern Belmont County and Monroe County... YOU CAN'T... honestly, they don't have a clue, they haven't done any seismic testing, no test wells... NOTHING... its just a guessing/fishing game right now.  How can you expect me to sign on to something like this without further knowledge about what is down there?  This is a foolish way to base a business plan on our part as landowners...this is all unproven.  Show me proof of what is there and its value and then we'll move forward.  Otherwise, you are buying into the "mystery bag" on THEIR terms.

Lastly, my neighbors are free to do as they wish... some I agree with, others I do not. Each has a different circumstance they are facing.  I, personally, will not be led astray by what others deemed right "at the time".  If its 5K or 35K, either way, great... just lease on my negotiated terms not their (company) terms.  You as a landowner still have what they need, you still have the power to say no (or yes).  As long as I am saying no, I'm still negotiating.  If I say yes, I AM DONE.

...By the way, I don't know Des nor am I in his group.  I am a member of the Smith Goshen Group (proudly, because of what they stand for) and so are about 2000+ acres of my contiguous neighbors here in SW Belmont County.

Good luck.

Permalink Reply by 09bp5t05myjl3 on December 4, 2011 at 9:05pm

Very well said Dan, Shocked sounds like just all the other landmen need to sign now or risk getting nothing, Don't worry about the upfront money sign up now & get the royalties sooner?? I know many people in Belmont and Monroe that signed and as of yet none are geting drilled any quicker that I See.

Permalink Reply by Finnbear on December 6, 2011 at 9:20am

Informed landowner groups will be the death of the landman. These groups severely reduce the number of potential victims available to the landman. Hence the screeching from the landmen we see here.

Permalink Reply by Mickgyver on December 6, 2011 at 2:31am

Hello Dan , Just to add a little more support to our patience game ,here is an excellent article published about the recent Chesapeake Deal for $15,000 per acre which included part of what Chesapeake had acquired and also part of what their partner Enervest acquired through the years .

The top man from Enervest states that this $15,000 has set the high water mark for Utica acres price , but he said not for long basically as the wells get proven up more through production reports .His article indicates a higher price in the near future

They are going to hold their own acres longer for the same reason that the prices will be rising to acquire acres in the near future .

here is the website to read about it .

As you said , the main complaining bodies on here are those that want to get a big feather in their cap by skinning a few more landowners before the price of fur goes up again .

I as well am standing with our group and am very proud that Larry and all the group has been willing to put so much effort without monetary pay for the betterment of everyone . the website for this nice article is below and it is not from some unknown source .

good luck  mick

http://fuelfix.com/blog/2011/11/03/chesapeake-enervest-deal-a-new-h...

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