What part of and which township in Guernsey County? Is there any drilling nearby?
Eclipse is going thru a merger with Blue Ridge, That deal is suppose to be completed later this 1st qtr. they will be changing their name to Montage Resources. This may be why there is no $ to shell out. I'd hold out a few months to see what happens. Once the deal is done, and they become Montage, their financial situation should change greatly. Looking at the map, it looks like your property would be included in a s.s.e unit from the Jupiter pad near Salesville on Rt.265.by Rose Hill rd. just guessing.
Thanks Bo, yes they are saying we will be in a unit this year, and I believe it. Our contract is over march 19, and in lieu of a bonus payment, they are offering an additional guaranteed year of delay rental, drilled or not. That in effect negates the bonus payment. Do you suggest waiting and letting our lease run out, then, negotiating? I'm being told over 80 acres of our 156 will be in a unit this year. The goal they say is to be drilled, right? I was just curious if anyone lease in millwood had expired recently to see if they released for less and no bonus payment. Thanks Bo.
I don't know anyone in your same situation,but I"m sure there is. Hopefully,they"ll read this and post. You have enough acres in that future unit to hold out for a better deal. maybe letting your current lease expire would give you more leverage. Talk to your neighbors,see if they are in the same boat. go together and hire an attorney who can negotiate a good deal for all of you. The % they would charge may not be as bad as trying to negotiate the deal yourself.
Thanks for the insight Bo We have an attorney, and he's the go between. Not sure how good he is at this point, but, he does what we tell him. I just worry about how hard we should push. Seems to me, if they are so adamant about signing so quickly, they're trying to shore up things as well as possible. Anyway, was just curious about others with recent re ups what they signed for. Again, thanks Bo.
My experience is not current, but in the spring of 2017 we signed with Eclipse on a 5 year primary/5year secondary term lease with $2,500 upon verification of mineral rights and another $2,500 at the end of the first year (so a total of $5k split across two years) and 17% "no cost" royalty. I don't know if that is better or worse than they are now offering. Just after I signed this lease, Eclipse stopped negotiating with some of my neighbors that they had acquired through the buyout of Rex and I don't think they have been signed yet. I am in the south east corner of Millwood township.
Thanks David. The offer now is for 1 grand per acre, 15%. No signing bonus but a guarantee of payment 2nd year even if drilled. This would negate the bonus pmt. Lease up in march. 156 acres. The past 10 year lease (oxford oil) with amendment in 2014 of 1250/ac and 15% paid over 5 yrs with Eclipse. I'm sure they will drill soon, and say it will be in wells Collins unit, with over 80 acres included in it. Some are saying we should hold out for the merger to go through, (Feb 19)and then see what the offer is. Not greedy but not into being played a fool by the landman. Any thoughts?
I am always hesitant to give advice because there is a lot at stake here and I am just a landowner trying to understand as much as I can about this whole process. I would hate to steer anybody wrong. With that being said 156 acres is a big chunk of land and you should have a pretty good position to negotiate from. Does the lease that they want you to sign/amend contain a pough clause? What if they only include 8 of your acres in the Collins unit instead of 80? Will the remaining 148 of your 156 acres be held so that you can't get any more signing bonus money? In one of your earlier posts you stated that you have an attorney - can they tell you what people in Millwood are currently getting? If not, you might want to try KWGD. I used them in 2017 and was happy with the outcome. They charged 6% of the initial bonus money but I thought they were well worth it. Did Oxford drill a shallow well on your property - that would limit your ability to negotiate substantially.
The best advice I can give is to not rush into anything. You may only get this one last chance to put a lease in place that you are hapy with. Once you sign it and they accept you can't go back. If you want to talk sometime I am going to send a friend request and I can give you my phone number.
I appreciate it david. My attorney is only charging hourly. Yes, last lease had a pugh clause, 60 acres or better. Standard, I believe. New offering is same % as last at 15%. Not sure how good attorney is, Not real happy at this point. No hbp on shallow well, but was threatened to be if it wasn't signed at the time. At that time, we had Eckler and they also only charged hourly, so it was only around 1500.00 for the negotiations. Anyway, just trying to garner the best deal. Scheduled to be in unit wells Collins this year. Guaranteeing minimum of 2 years delay rental fracked or not in lieu of signing bonus.
The 15% royalty seems a little low to me. Is that 15% with no deductions or market enhancement costs? My lease is 17% with no deductions. According to the ODNR's last production numbers roughly 5 of the top 10 wells in the state for the quarter were in Millwood township. I would think you should be able to ask for (and get) a better royalty.