We were recently offered a new lease in the LeRaysville area and was wondering if anyone else has been offered a new lease or have been contacted recently? Our lease expired over a year ago but there seems to be some renewed interest. Of course the offer is substantially less than the original lease from 2008.

Thanks, and I hope everyone had a blessed Thanksgiving Holiday!

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We are in LeRaysville and got a lease last year. May I ask what company has interest? We are with Talisman.

Can you share the details so that other landowners can judge the significance of your report? Without knowing who made the offer, the bonus and royalty, and the length of lease, it is hard to know if this is favorable or not. The more information owners have, the better we can deal with the gas companies. They are information rich and tend to exploit our lack of information so please share.

Sure John and thanks Dawn,

The interest is coming from Talisman at $1,000. per acre and 15% on a 5 year lease. Any feedback would be appreciated.

I'm in a group called the Mosherville Alliance in Wells Township which is in the NW corner of Bradford County which is another Talisman area. They have recently gotten permits to drill two Utica exploratory wells in our township. They have a number of single well units in production which likely will be expanded to 6 or 8 wells before they lease for new pads. There has been a little leasing interest with numbers similar to yours possibly to extend the length of longer horizontals than were originally permitted. I think new development will be driven not just by the obvious - gas prices - but also by the decline of currently producing wells and new pipeline capacity to move the gas to market. Utica development, if it pans out in our area, will also be a factor. Bottom line is that I wouldn't lease at the terms offered but others may need to. Shell claims they will not negotiate but I think Talisman will. I'd make a counter offer. It might be wise to negotiate for a higher royalty or if money is needed now ask that the bonus be higher for 5 years vs. 3 years. 

Son in law and Daughter just signed for same offer. $1000 for a 3rd of an acre and 15%. That isn't that bad. They live in town.

Hi, Kenny

Please note carefully this is only MHO:

I think that's an opening gambit on Talisman's part.  They can do a bit better, though not anything close to the 2010 (or whatever) high numbers.  If you are willing to work with them, there's a real chance they will be willing to work with you.

Talisman is a reliable partner, and I believe an honest company.  Good luck. 

Thank you Frank and John, that is good input/advise. 

From what I read, the royalty % is not that important when they can make the expenses look like whatever they want. $1,000. per acre is $1,000. per acre more than we have now and it is refreshing to hear that Talisman may be a good partner/honest partner which seems to be the biggest concern these days. I guess it is just as important to sign with the right partner as it is getting the best rates.

Kenny I would like to offer my observations on your post. make sure your lease contains a no deductions clause. Even though companies try and do take deductions initially court cases are now moving the no deductions clause. Royalties are years and years of income, dependent on the price of natural gas. And should companies find natural gas in the Utica shale deposit, which is below the Marcellus shale, we are looking at multiple generations of income.

So the long term view is important here as well as the lease language. Finally the tax rate on a lease payment is different than your royalty. Please take a longer view of your lease in this light.

And whatever you do, under no circumstances sign ANY lease that has an arbitration clause. Do NOT DO THAT! If a problem arise you likely WILL NOT be able to take the O/G company to court.

% is very important way more than the $$$ per acre IMHO. Also what was also said to your post very good advice. Take your time and get a good lawyer. The wells Cheifs brought online just south of LeRaysville are doing very good.

I am located near LeRaysville and have had no interest whatsoever....we were supposed to be in a unit but the unit was never developed..we are south of 467

We are in Tioga county in PA and recently signed a top lease with Talisman with three pages of addendums including no surface activity for 1500/15 with all the verbiage we (my attorney and I)could fit regrading deductions. 20% now, 80% when old lease terms out next year. Is five year with three year extension clause. We thought it was very fair and negociations were a bit lengthy but, all worked out. FYI, retain competent and knowledgable council. They are worth their weight in gold on these issues.


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