Replies to This Discussion

Permalink Reply by Robert Bond on August 14, 2011 at 7:29am

I think the Eagle Ford shale was an estblished and proven play long before it got to this level.  Also from my understanding the higher yielding lease are offered only in proven sweet spots.  I have read that in some parts of the Eagle Ford the rate is actually lower than in this county.  We need some actual proven production number for here.  I am all for higher numbers if they can be justified but, we need to keep the fact in focus that the real income comes from production not bonus payments or high royalty percentage leases that a company will not pick up.

Permalink Reply by Jon Henderson on August 14, 2011 at 7:38am

You are probably right, but it seems that while most landowners are getting similar signing bonuses as here ($1500 - $2500/acre), they won't take less than 25% royalty. I would think the oil companies would push for more bonus and less royalty from the sweet spots.

Permalink Reply by Shower Bath on August 14, 2011 at 7:47am

Jon, If you go to DEVON Energys' homepage and check their financial presentations, you will find that they consider 20% landowner royaltys to be LOW and to the advantage of the O&G company. At the KWGD Group 5 meeting in Cambridge last week I discussed this issue with Attorney Williams, and suggested that we negotiate from the 25% starting point rather than the current offering of 17.5%/20% which seems to be the current offers. Of course the O&G companies will offer higher signing bonus or offer to pick up the attorney fees for the group, instead of paying the higher royalty. I feel the Utica wet play is most likely as good as the Eagle Ford play in Texas or maybe better and that the landowners are selling the resources at the early play low-ball rates. That being said, everyone has to make their individual decisions based on their individual needs and circumstances. Good luck to all landowners as we all try to make the right decisions. Like they say, "you only get to sell these one time, and then they are owned by a large company."

Randy

Permalink Reply by Jon Henderson on August 14, 2011 at 7:52am

 Just stumbled across this on the net..... looks like its from 2010.

 

Dear Neighbor:

Chesapeake Exploration, L.L.C. (“Chesapeake”) is pleased to announce that we have recently reached an agreement with the Hightower/WAMRA Consolidated Coalition (“HWCC”) Committee regarding the mineral development of your neighborhood. This important agreement comes as a result of months of negotiations and presents a very attractive leasing opportunity for the members of the HWCC Community. Please take a moment to review this letter, as the endorsed agreement is customized to the individual landowners and involves multiple legal documents.

Every landowner will receive four documents, which are endorsed by the Committee and approved by the Neighborhoods legal counsel: (1) the Oil and Gas Lease form; (2) a Memorandum of Oil and Gas Lease; (3) a W9 Tax form, and (4) an Authorization Form to Request Subordination/Non-Disturbance Agreement.

Subject to final verification of title and contracts related to this transaction, the business terms of the endorsed agreement are as follows:

 

• Signing bonus consideration of $5,250.00 per net mineral acre
• 3 year Primary Term
• 25% Royalty interest
• 2 year option to extend built into lease, which will include $2,500.00 per net acre if Chesapeake exercises the option to extend
• NO SURFACE operations on your leased premises

 

Your lease signing meetings will be held at 4:00 p.m. – 8:00 p.m. on Tuesday, June 8, 2010 and at 9:00 a.m. – 5:00 p.m. on Saturday, June 12, 2010 at the Fort Worth Christian School cafeteria, located at 6200 Holiday Lane, North Richland Hills, Texas 76180. Please attend the meeting that is most convenient for you and your family.

Chesapeake has retained Petrocasa Energy (“Petrocasa”) as our independent contractor authorized to lease on our behalf for all HWCC properties located north of Chapman Road. There will be Petrocasa representatives present to assist in answering any questions you might have, and to facilitate the execution of the aforementioned lease documents. Petrocasa will prepare your personalized lease documents in advance of the meeting, and those documents will be on-hand at the meeting times shown on the attachment.

Please bring a photo ID, and if married, please have your spouse attend the meeting as well. If possible, please have your Social Security and mortgage information available in order to complete the lease package. Be assured we will do everything we can to make the signing of your lease hassle-free and convenient.

If you are unable to make it to your scheduled meeting or have any further questions or concerns please feel free to contact Petrocasa at (817) 820-0288 begin_of_the_skype_highlighting              (817) 820-0288      end_of_the_skype_highlighting or via email at HWCC@Petrocasa.com. The HWCC website, located at http://hwcc.angelfire.com, will also contain information regarding our lease signing meetings and will be updated with any changes to the schedule.

For additional information about Chesapeake Energy Corporation, the Barnett Shale and mineral leasing, please visit: AskChesapeake.com

Sincerely,
Chesapeake Exploration, L.L.C.

Oscar Duarte

Permalink Reply by michael j belaj on August 14, 2011 at 11:10am

This is a note to Dear Jon you are going to be one of the land owners that are left out or should be I have lissened to you for several . Good luck that is the best I can say. Mike

Permalink Reply by Jon Henderson on August 14, 2011 at 2:23pm

Mike,

I am certainly not going to be one of the land owners left out. I am not advocating anyone holding out for 25%, I am just wondering why it's practice in Texas. Their Oil and Gas sells for the same price that ours does.

Permalink Reply by Jon Henderson on August 14, 2011 at 3:02pm

Mike I know you have said before that you have expertise in O & G things, but what is your play in the Utica? Are you a landowner or an operator or attorney or what? Just curious.

You seem pretty upset by my posts.

Sorry, I'm just trying to get people talking and sharing info. That's how we learn. 

Permalink Reply by michael j belaj on August 14, 2011 at 9:43pm

Jon I am A mineral owner and a operator also a land owner, I have seen greed spoil a play and that can be on bouth sides. For the game to be fair you have to have some skin in it. Lets say I come to you and want to drill a well cash is tight so I make the offer  you get 25% I get 25% and the money man Gets 50%. I call that a fair deal with the money offered today and the percent offered the money man is being offered a stack deck he wont want to play and he will go home. Keep it fair the attorney allways make thier  money they may even offer may I stack that deck for you sir. I have seen these Texan  come to Ohio befor and go back home it seems to happen on a 20 year cycle lets all make some money and have a good time. Keep the deal fair! Thanks Mike

Permalink Reply by Shower Bath on August 17, 2011 at 5:26am

How much is it worth? Whatever the market will pay. Check this story:

http://www.rigzone.com/news/article.asp?hpf=1&a_id=110217

 

Randy

Permalink Reply by paul geiger on August 19, 2011 at 4:45am

Jon ,I found this morning from the PA site for Wyoming county PA . And try to think with is with out any OIL .

Wyoming County Landowners

PO Box 798 | Tunkhannock, PA 18657

www.pamarcellusshale.com | Contact: Bill Wilson or Chip Lines-Burgess

Wyoming County Landowners Group (Wyoming County, PA): http://pamarcellusshale.com/ Please be advised, our group effort is complete. We have successfully lease and we are signed. We received $5750/acre and 20% royalty. For those within Wyoming County PA still needing to get signed, with our lease and terms - follow this link http://forms.askchesapeake.com/landowner/ You'll want to do this soon - we don't know when they will cut off that offer.

$ 5750 and 20 %

Permalink Reply by Jon Henderson on August 19, 2011 at 11:47pm

Got a phone call around 10pm last night to watch a documentary on CNBC on the HAYNESVILLE SHALE. Very interesting piece. I don't know when it will run again, it was originally broadcast in November 2010. It shows the JOYS and the Disappointments of people in that area. Some hit it big, some were told their land was held by production (since 1955). If you get a chance to watch it you should. Very Informative on how it can all come about or fall out.

Paul, thats an interesting link you found. Looks like that occured in 2009 and there were 3 phases to them signing. Thanks.

Permalink Reply by Philip Dobeck on August 20, 2011 at 12:49am

Quite interesting

 

If you look at the 2008 lease on this page it references "Raegayle LLC" and Chris Robinson.

http://pamarcellusshale.com/SIGNING_INFORMATION.html

From the Homeland Energy page sample lease

http://www.homelandenergyventures.com/PDF/RaegayleEngagement2.pdf