Replies to This Discussion

Permalink Reply by Nancy LeNau on October 1, 2014 at 2:58pm

My neighbor called me today.  He has the farm next to ours.  We are in Hookstown, PA.  15050.  His lease expired 5 days ago.  Range contacted him to buy a lease.  Offer was $2,500.00 per acre and 17 %.  I think this is way too low !  It was for a 5 year contract only.   He was on his way to a meeting so this is all I could find out.  His lawyer told him this is a good offer.  I disagree and told him so.   He is with the bird in hand concept.  I think he will sign.  Very  Nice Family but Not Happy with his choice.  

Permalink Reply by Todd on October 1, 2014 at 3:27pm

Hi Nancy,
How many acres does he own?
Perhaps, you can request he at least negotiate to include a vertical Pugh Clause and a horizontal Pugh Clause.
Also, I would advise him to have a competent O&G attorney review the lease or he'll be kicking himself if he does not. He need not be in a hurry to sign; this is a generational contract that will most likely have this one opportunity to negotiate.

Permalink Reply by Nancy LeNau on October 1, 2014 at 3:45pm

Thanks Todd... I just sent you this information in your message box.  I will call him tomorrow.  Not sure of the acres.  I will find this out tomorrow.  He has had the same lawyer for 3 years.  I don't know how competent he is.    Many Thanks and God Bless.

Permalink Reply by Nancy LeNau on October 12, 2014 at 2:58pm

He owns over 100 acres.  He is afraid Range will just go around him if he does not sign.  I don't think so.  I wish him the Best !   I gave him the information Todd gave me.  Thanks Todd !  God Bless.

Permalink Reply by mark ondrusek on October 13, 2014 at 2:11am

just my 2 cents for what its worth..i am no expert but I think that is not a bad offer right now.  that is the best I have heard around here in a while.  I know tons of people w expiring leases that would jump on that now!

Permalink Reply by Gary on October 13, 2014 at 3:20am

Mark, I agree that it has been quite a while since any company has been in this area..ie..north of 151. I believe it is going to start happeniing in the Hookstown area with in the next 4yrs....I signed a year ago now for 2250.00 and 17% a lot better than I had before in lease terms..I hope that within the next 4 yrs something will happen..if not I'll sign for the 4th time..free money...I would sign with RRC for half of what CHK was giving just to not have to deal CHK issues..just my thoughts... 

Permalink Reply by Nancy LeNau on October 13, 2014 at 2:47pm

Gary, I was told by a very reliable source it will be Fall of  2016.  I guess we all shall see ?  Being patient....  is really getting old !   HA HA    Maybe this time frame just might be a Gift.... seeing what the price of gas and oil are now.  

Permalink Reply by Tim Tarr on October 13, 2014 at 3:43am

I'm in Buffalo Twp. Washington county so you're a bit out of my "comfort zone".
Get a Competent Lawyer. RRC might reimburse legal fees at signing. Never hurts to ask.
I would try for 18% minimum that works out to ~12.5% after deductions. That 1% doesn't sound like much but over time it will add up. If you lease with RRC I would give it 98% that lease will be "forever".
So make sure that lease has all the "Bells and whistles". There is very little chance that there will be another opportunity for changes or another bonus in 5 years.

Permalink Reply by Gary on October 13, 2014 at 4:39am

I leased with RRC and lease expires in 5 yr...17% and no deductions..pugh clause for min of 1/3 of property and realses the rest after lease term..not a great lease but not to bad one either..

Permalink Reply by Todd on October 14, 2014 at 3:22pm

You're welcome as always Nancy! :-) 

As you know, Range has interested competition from the Consol/Noble operated venture south of the Ohio River in their CONE Midstream Dedication Area.  Please let me know what interest your neighbor can conjure up from them and perhaps, EQT.

Please see attached presentation.

Thanks & God Bless,

Todd

 

Attachments:

• CONE Midstream September 2014 Presentation.pptx, 5.1 MB

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