Replies to This Discussion

Permalink Reply by Kathleen on October 2, 2012 at 1:37am

http://bcfminerals.com/

Permalink Reply by Utica Shale on October 2, 2012 at 2:03am

CD,

 "... Why give it to someone else ..."

 

 Are you assuming that 100% or at least a very large percentage of your land will be in a Royalty paying unit? Is that true for everyone? That may be true or that may be false. What if a landowner sells their O&G Rights to an investor and their land is never drilled or is minimally drilled? In that case, the Landowner did make the correct decision by selling their Oil & Gas Rights.  Waiting for Royalties from a producing well does not guarantee the highest income, or any income, to the landowner.

 

 Acreage in the Wet Gas fairway currently has a much higher chance of being drilled. Acreage with Dry Gas, to the East, could be drilled whenever Nat Gas prices increases above $3.00 (+/-). The farther West the acreage the less likely a well will be drilled unless you can wait about another 50 million years for the thick ooze to mature into Oil & Gas.

 

Permalink Reply by jonathan M. on October 2, 2012 at 2:13am

Us,

You bring up a very good point ive done some research concerning this. It appears that in most shale plays the area that is originally thought to be prospective shrinks considerably as more and more wells get drilled. I have been going on the sister site gohaynesville shale and I've read that A LOT of acreage tha was once thought to be prime was never drilled and may never be drilled. At the right price I would consider selling a portion.

Permalink Reply by Kathleen on October 21, 2012 at 3:35am

32 acres of minerals sold in Elkton township. Fully leased to CHK in 2011, pipeline right away leased 2012.
Minerals sold to triple crown energy $135,744.00. Deed pending.
These people got every dime out of those minerals without a royalty check.

Permalink Reply by Utica Shale on October 21, 2012 at 7:59am

Kathleen,

"... Minerals sold to triple crown energy $135,744.00. Deed pending.
These people got every dime out of those minerals without a royalty check ..."

 

If true, then how can Triple Crown Energy make a profit by paying full face value for mineral rights?

This tells me that Triple Crown must think the royalties will be significantly more than $135,744.00.

 

Permalink Reply by Kathleen on October 21, 2012 at 8:25am

Hi,

It was in the salem paper today under property sales. I feel funny posting the name of the seller but it is public knowledge, so here it is.
Margaret E. Weddle to Triple Crown Energy LLC, mineral rights for 32 acres on Dutchtown School Road; $135,744.
This is almost exactly what I was offered per acre (4200) for leased minerals. I know I'm further west. I thought it was a nice price since they don't have to pay all those taxes but maybe the minerals weren't leased yet but I checked on the online clerks office and they are.
IMO I bet they are betting the area will give 3x the sale price when its all said and done.

Permalink Reply by tacoma7583 on October 21, 2012 at 9:44am

The unsolicited offer I received from BCF minerals  to purchase my mineral interest was $4200 per acre, so I too would say it is possibly worth significantly more when said and done,     Im in knox twp columbiana county.     

Permalink Reply by Utica Shale on October 21, 2012 at 10:15am

Kathleen,

 I saw the minerals transfer online ...

 http://www.salemnews.net/page/content.detail/id/559456/PROPERTY-TRA...

 

 Your message made me think about this statement that I have heard so many times...

 The Royalties is where the money is, not the Signing Bonus.

 Well, if I got $5,800 per acre for my Signing Bonus then

 this Royalty Payment is only $4,343 per acre ( $135,744 / 32 acres )

 HUH ?

 In this case the Royalties are less than the Signing Bonus - ouch !!!

 

 This Royalty Payment of $135,744 is only the FIRST YEAR Royalty payment for this 32 acres per Markus Grayson's calculations on Page #1 of this thread where he states $292,500 is the First Year Royalty Payment for a 100 acres.

 

 The question is how quickly will the Royalties drop in year 2, 3, 4, etc ?

 Scenario #1 - If the well is choked down (by the driller) and the total flow in the current year is significantly less than 50% of the total remaining recoverable gas & liquids then the well will last much longer than 6 years.

 Scenario #2 - If the flow rate in each year is higher than 50% of the remaining recoverable gas & liquids then the well will deplete very quickly.

 

 If this 32 acres can generate $135,744 of Royalties under scenario #1 then the landowner has lost several additional years of very good royalties.

 

 If this 32 acres can only generate $135,744 of Royalties under scenario #2 then the landowner has lost about 1/2 of their total royalties.

 

Permalink Reply by Kathleen on October 21, 2012 at 11:03am

Yup in this case if they signed high. I have a feeling from looking at the public records they did not. The timing shows lower and DPS penn held it for 3 months before handing it CHK. I never noticed that scenario before.
There are just so many fun ways to look at this as you know :0). Right now they have 135,744.00 heading straight into the bank but if they got this over time and these royalties put them in the upper limit with regular income they would only have 81,446.00 heading into the bank if scenario 2 happened.
I seriously can see why people sell at times.
I think in time our county or state will catch up to this and start looking at sales of minerals and find ways to tax these types of sales. If nothing else they will just start taxing minerals separate than land.
Overall I still see a low number here for 32 acres all over the place for these people. I know I'm guessing on some of this. I bet you a dollar they didn't get 20% gross out of DPS Penn in Feb 11' for royalties either. Wow so to think about it the co. that bought this must really believe in this area.

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