Replies to This Discussion

Permalink Reply by Philip Brutz on September 25, 2012 at 1:57pm

You would be giving up all future royalties for a onetime payment that you may have to pay up 34% tax on.  Think about it very carefully.  Depending on your age and health and how much you need the money now it might make sense.  I would not however take the first offer.  You would become a surface owner with limited rights on how they use your land.  Could they put in an injection waste well with truck traffic 24-7 and nonstop compressor noise?  I would talk to attorney Richard Yoss,(740) 472-0707 or another good lawyer specializing in oil and gas before you sign away anything.  Remember our neighbors in Belmont and Monroe whose ancestors signed away their coal rights and now have to deal with longwall mining.  You may want to read the West Virginia Surface Owners’ Guide To Oil and Gas if you decide to sell.  I wish you the best in whatever choice you make.

Permalink Reply by Dawn Blake on September 25, 2012 at 2:22pm

Thank you for your response.  As far as future royalties, the company that has the well now isn't doing anything.  Checks are few and far between. The last time, the tank was full and I believe they only sent roughly a 100.00 if I remember right.  We only can wonder if that will ever improve or what will ever be done or changed.  As far as my question, thank you again for the response.

Permalink Reply by Philip Brutz on September 25, 2012 at 2:29pm

The company that has your lease may sell it to a bigger company like Gulfport who may drill a deep well into the Utica. You may then get around 12.5% royalties on a much larger flow of gas.

Permalink Reply by Dawn Blake on September 25, 2012 at 4:08pm

  Feels like gambling. Never sure of what to do or when  :)  Thanks again

Permalink Reply by Philip Brutz on September 27, 2012 at 5:14am

After reading this article you may want to sell your mineral rights.

http://www.ohio.com/business/natural-gas-pipelines-to-expand-u-s-su...

Permalink Reply by Dawn Blake on September 27, 2012 at 6:18am

It's not opening up for me for some reason. I will try again soon.  Are you saying we should just flip a coin, and go with heads or tails?  lol ..... sighhhhh

Permalink Reply by Philip Brutz on September 27, 2012 at 9:50am

Here is the article

Ohio.com > Business >
Natural gas pipelines to expand U.S. supply glut

By Naureen S. Malik
Bloomberg News
Published: September 26, 2012 - 09:47 PM
shale27cut
A crew works on a gas drilling rig at a well site for shale based natural gas in Zelienople, Pa. in this June 25 file photo. (AP Photo/Keith Srakocic)
View Larger Version >>

Natural gas pipelines coming into service by year’s end could boost deliveries from the Marcellus shale deposit in the U.S. Northeast by 30 percent, extending a supply glut that helped send prices to decade lows.

As much as 2 billion cubic feet of gas a day are set to flow from the lines in Pennsylvania, Ohio and West Virginia, bound for markets along the Eastern Seaboard, based on government and pipeline-company projections.

About 1,000 Marcellus shale wells sit uncompleted, mainly because of a lack of pipeline infrastructure, according to the Energy Department.

Gas prices have dropped 60 percent since 2007 as producers used techniques called hydraulic fracturing, or fracking, to reach supplies trapped deep in tight layers of shale. Gas futures tumbled to $1.902 per million British thermal units in April, the lowest price since 2002, as stockpiles ballooned during a mild winter along with record U.S. production.

“There are new pipelines coming up and more Marcellus gas is going to flood storage going into winter,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “Unless you get a really cold winter, prices are going to be in the $2 range.”

Natural gas for October delivery traded Wednesday at $2.985 per million British thermal units and is down 0.1 percent this year.

Futures have averaged $2.679 since the April low after rising as high as $3.277.

Prices may average $3.20 during the first quarter of 2013, when demand peaks, based on the median of 18 analyst estimates compiled by Bloomberg News.

“Higher prices are all predicated on more normal space heating” this winter and demand from power generators burning gas instead of coal, said Teri Viswanath, director of commodities strategy at BNP Paribas SA in New York, on Sept. 21. Viswanath expects first-quarter prices to average $3.60.

Cabot Oil & Gas Corp., which pumps gas from Marcellus deposits in Pennsylvania, has a break-even point that’s “probably below $2,” Chief Financial Officer Scott Schroeder said in a Sept. 14 interview from Houston.

About 4,525 miles of interstate gas pipelines serving consumers from Maine to Virginia have been put into service since 1996, Energy Department data show. About 693 miles of lines in the Marcellus, with a daily capacity of 8.06 billion cubic feet, are planned, under construction or already in service, according to Federal Energy Regulatory Commission data going back to 2006.

New pipelines can quickly add 1 billion cubic feet a day of Marcellus gas to the market and as much as 2 billion, as projects with 3.5 billion cubic feet of additional pipeline capacity will be completed from September through December, Viswanath said. Marcellus gas output in May averaged 6.85 billion cubic feet a day, according to the most recent Energy Department data.

Shale gas has been key to the country’s move toward energy independence. Production gains helped the U.S. meet 81 percent of its energy demand in 2011, the highest level since 1992, according to U.S. Energy Department data compiled by Bloomberg.

Laurent Key, a natural gas analyst with Societe Generale in New York, predicts that 900 million cubic feet a day of Marcellus production will come online in the fourth quarter, according to a Sept. 10 note to clients. Key’s first quarter price forecast is $3.07.

Permalink Reply by Bernie Horabik on October 1, 2012 at 2:01am

Wow!  1000 wells drilled but not on-line!  That is an amazing #.  Thanks for the Article.

Permalink Reply by Danny Lowe on October 15, 2012 at 2:05am

Be Careful. EQT and Anadarko is developing your township. This company might know what units are going to be produced. Just because your land is held by production now does not mean you are shut out of Lease bonus money. The Utica producers are approaching the local Shallow well producers and offering them the cash bonus money but only if they can have a lease they can operate on without legal issues. The local producers are going to have to come to the current mineral rights owners and have addendum and ratifications signed to the original lease. That means you need to negotiate for some cash up front for these changes.

Permalink Reply by Bernie Horabik on October 16, 2012 at 2:21pm

I don't think that is going to happen anytime soon!  The only incentive is to drill the term acreage.  They can circle back around 30 to 40 years from now and drill the folks that are held by existing wells.  These guys aren't going to pay too many extensions if they don't have to. 

Permalink Reply by JD on October 22, 2012 at 12:16pm

We are experiencing a similar situation in Guernsey County.  We have a shallow well that is held by production which yields less than $100 per year.  The current drilling company has approached us to sign an agreement allowing "them" to drill on our land.  I was suspicious as they already have an old lease on our land, so why would they need us to sign anything!  After talking to an attorney, my suspicions were confirmed.  The current drilling company is going to "flip" the drilling rights to a large company and keep all the profits.  We were not offered any upfront costs, but were promised the WORLD once the gas started pumping out!!  Don't be fooled .... 

Permalink Reply by Dawn Blake on October 22, 2012 at 2:08pm

That is not very comforting to know. We have not heard anything from our current drilling company at all.

• ‹ Previous
• 1
• 2
• 3
• Next ›
• Page