Replies to This Discussion

Permalink Reply by terry hazlett on April 4, 2010 at 11:47pm

Dennis, not really , they want to charge you 15% OF YOUR BONUS MONEY! Plus they're contract terms are very vague as to getting out if you ever want to. We're trying to get a group going for butler residents, $15- $20 to join, then a small per acre fee to cover legal expenses when offers are made, modeled off of one of the big groups that signed like friendsville group. 15% can turn out to be quit a bit of cash! let me know if interested.

Permalink Reply by Lease Expert on April 5, 2010 at 1:55am

Terry you are obviously mis-informed. Dale works exclusively for Chesapeake. They Charge the Land owner Nothing as they are paid by Chesapeake. You on the other hand are charging $15.00 per $20.00 per acre and calling it a small fee. Based on 500 acres you are charging $10,000 ?

Dale has two leases, a 5 year lease and a 5+5. Ask for no extension in the lease and its a 5 year lease with no loopholes.

As to answer the original question. Dale is a good company however known for hiring inexperienced Landman and training them. Doesn't mean they are bad, but have been known for pressuring the Land Owner a bit. They are trained to be honest and the higher ups at Dale spend a lot of time going over ethics etc with their employees.

Be careful of jumping on board with "groups" I work with good groups and bad groups. Like a church, a group is only as good as its members, 99% of members are focused on upfront money and royalty which is honestly only 50% of the equation. Also they think the larger they get the more valuable they are which isn't always the case. I am working with a 7k acre group and a 11k acre group in untested areas and I cant get them a deal. For over a year I have shopped them around and even in this boom cant get them leased due to their demands.

So is it better to be a part of that group waiting for 7k per acre? or leased and being drilled on? Well I guess its up to what the land owner wants.

Good luck!

Permalink Reply by Bill on April 5, 2010 at 3:01am

Lease Expert,

I believe Terry might have been referring to Dick Landowners Group, which is in fact charging 15%.

Bill O

Permalink Reply by Dennis on April 5, 2010 at 3:48am

I am reviewing their Lease and I have asked them to delete the language that appears on the bottom of page one referring that the Lease payments be "less the cost to transport, treat, and process the gas and any losses in volumes to point of measurment that determines the revenue realized by the Leassee."
They quickly agreed to do this but insisted on inserting a Marketing Enhancement Clause that lets them charge for other processes that will enhance the value of the gas. Although they are offering 17%, I think that in the end I will receive the state mandated 12.5 % if I am lucky. In the end, they can afford more legal council than I could ever dream of and with all due respect, they will get their way.:

Permalink Reply by Bill on April 6, 2010 at 3:15am

Dennis,
It's not necessarily who has "lawyered up" more. You have something they want, and it's all negotiable. Scan through this site, for tidbits and info on how to handle negotiations with landmen and to counter objections from them.

Don't give in before the battle starts!

Bill O

Permalink Reply by Dennis on April 6, 2010 at 5:29am

Thanks Bill O, That is good advice. I will heed it. Do you reside in Southern Butler County,

Permalink Reply by Bill on April 6, 2010 at 6:10am

I'm actually in Ohio, but our property is in Clay township; northeast I guess.

Bill O

Permalink Reply by Dennis on April 6, 2010 at 7:34am

We are in Buffalo township, southeast corner of the county

Permalink Reply by Lew Thomas on August 9, 2010 at 4:04am

I also have property in Buffalo Township. I've come to a conceptual agreement with two different DPS PENN landmen. Both disappeared after my attorney asked for language changes in the lease.

Permalink Reply by lucky on August 9, 2010 at 2:27pm

Be careful, the state mandated 12.5% does not take into account a lease where you sign allowing any type of net versus gross payment. you may get the min. 12.5% but after deductions by law they could in theory take you to 0% if you sign a lease with any clause that lets them deduct for any kind of expenses, you are signing a net payment lease and that should be a deal breaker.