I was wondering if people have started getting royalty checks in Bradford yet. My husband and I own 25 acres and have negotiated 20% royalty along with a $5500 bonus. We signed last year. How much will we make in royalties? I know that there are many variables but I'm just looking for a ballpark. I know there are online calculators but I have no idea about some of the variables I need to input. If anyone can help me out with info, please let me know. Thanks!
thanks, I will be sure to have my lawyer check all this out.
I have never read a lease from Chesapeake that states royalties
are paid "after" production costs. Production starts when a well is completed and declared performing. The landowners share in the cost of production at the level of their royalties (12.5% royalty equals 12.5% of production cost). Payment is made at the time of sale. You and few others on here are confusing (deliberately?) exploration costs (acquisition; drilling; completion) which are NOT part of production and NEVER Charged to the landowners.
$4000/acre is low. But a 16% royalty fraction is very, very low. It is unfair.
If your acreage is at all strategic, you should hold out. JMHO
That's high where I am for both incentive and royalty. Where do you live and which company is being generous?
Barbara I appreciate your input. The opinion I posted earlier is based on a year-old outcome. Certainly it is possible things have changed for the worse (for us landowners, I mean) with the passage of time. If so, my post above should be considered with the caveat that it is based on year-old numbers.
I do stand by my advise regarding holding out if it is a strategic property. Any such holding out, of course, runs the risk of being passed over. It's a balancing act, and a tough one.
At one point within the last few years 20% royalty fractions were commonplace here in Bradford County. If that has changed for the worse, then my earlier post is off the mark and outdated. Still, for strategic properties I would think 20% might remain within reach . .
If drilling nearby is not bringing hoped-for outcomes for the gas company, well, then 20% today could be out of reach. Recent revelations are showing tremendous well profitability variation within Bradford County. It has been an eye-opener for me. But without going into detail, I can tell you I am not in one of the better regions. Production here where I live is very modest.
thanks...that narrows it down a little bit...........the well i am connected to is not yet producing...it will be a bit as the pipeline is still under construction...and of course the company will turn it on in their own time....so it is somewhat nerve wracking to see the wild fluctuations in production and have no idea what is in the cards for any particular well. i'm east of troy, but not in the eastern part of the county.
how did that auction go? it was rather an amazing situation and i haven't seen/heard the outcome.
I believe the acution closed at a bit over a million.
It's not, however, that outcome to which I earlier was making reference. It is the data published prior to the auction that that York property was (at one point in time, at least) throwing off (what the heck was it) $150K or $180K per month in royalties? It was a gargantuan number, whatever it was, for 50+ acres compared with anything I ever saw here where I am for a parcel of that size.
The wells down by Troy are just much more productive, I guess, and the people down there are going to be a lot richer than us "poor but honest" second place finishers . . . .
Uh, OK. If you want to consider and include folks over in eastern Bradford, who put even the Trojans to shame, then I guess we are third place finishers here where I am. But it's only money. Who's counting!?
Barbara, yes. Thank you for the dopeslap. I needed it!
You are correct and I was so far off the mark. Good heavens!!
This was a complete and total no excuses brain fade for me.
Only good thing:
I sure feel a lot better now that you have pointed out my error. :-)
Not by way of excusing a bad error:
I customarily think of these things in terms of $$/acre/month or else in terms of $$/acre/well/month. Don't usually think in terms of "per year" because the declines are so significant over that much time.
Roan advertised $180K/year.
So York, if you average which is not smart, is working out to circa $15K/month which is roughly $290/acre/month. I don't know how many wells are in the unit so have no choice but to just let that slide. But if the unit is fully developed, I would have to say $290/acre/month is a low number, possibly due to well age. Or else my guess would be this could be Chesapeake playing their HBP games with perhaps one or two wells where six or eight are needed in order fully to drain the unit.
Anyway, thanks again for catching my error. It was a whopper!!
[Unable to reply directly to your post because there is no "reply" showing up for me at the bottom. Had to reply to my own earlier post. Hope this works out OK]