Replies to This Discussion

Permalink Reply by Jim Gibson Tope Hill WV on August 24, 2011 at 4:21pm

have an offer of 2250 an acre and 15% post production on tope hill clay dist from chesapeak

 

countered with 3000 and 15% gross waiting to hear

 

confirmed from buddy just got 3600 and 18 %  gross in marshal co  with no dilling to the utica level with out new negotiations

Permalink Reply by Todd on August 28, 2011 at 5:09am

Hey Jim, 

It sounds like CHK is low balling you with only 2250.  We have the same Utica under us as Jefferson County does (3700 there).  3000 is descent though and great idea gettin 15% gross... that would be much better than ie. 18% net/post production costs.  I would try to negotiate for 3500 per acre now but my current lease doesn't expire until next May... I have about 75 acres on Hardins Run, Clay District.  How many acres do you have on Tope Hill?

Did Brian tell you they're drilling into the Utica or Marcellus here?  We have very little depth of Marcellus here (25-50 feet) vs Marshall County.  Our money is in our Utica which is thicker here (300-400 feet thick!)

We have the 2nd thickest Utica shale available, easy access to the Ohio River, plus we're on the east side of the river for easy pipeline access to Pgh and the NorthEast market!

 

Check out www.dep.wv.gov/oil-and-gas for current permit and drilling activity.  CHK has applied for 19 permits just south of us in Brooke County just since January 2011.

Permalink Reply by Todd on August 28, 2011 at 5:26am

In addition, our Utica is full of natural gas and natural gas liquids.

Permalink Reply by Shields Mayhew on September 23, 2011 at 8:26am

Todd,

Skip Mayhew here.  I have 130 acres on Frankfort and an also under lease until May 2012.  I heard of someone who has 30 acres on Florence.  He is ready to sign with CHK for 3k per acre + 17.5%.  Do you have information when they may start drilling in Hancock?  I am afraid they may drill on my land before my lease expires.  My lease was assigned 3 times, eventually ending up with CHK for the 2011/2012 year.  If they drill under the current lease, it can not be renegotiated, as I understand it.   

Permalink Reply by Todd on September 23, 2011 at 11:23am

Hi Skip,

Who did CHK acquire your lease from?  I believe it's highly unlikely that CHK will commence drilling in Hancock county until late next year... First, they need to apply for permits after they lease as much property as they can.  Currently, no permits have been authorized for CHK to drill in Hancock.  With our current lease expiration, we should be in optimal position to get our money's worth.  Also, you can negotiate earlier than your lease expiration by a couple months.  No worries.

That's true about not being able to renegotiate after drilling is commenced.

Thanks for the info, Skip.

Permalink Reply by Shields Mayhew on September 26, 2011 at 5:31am

Todd,

The lease trail was Wilkes Energy to Fortuna Energy to Range Resources to CHK for the 2011/2012 term.  I did speak to a guy, Matt Pasquinelli of Kenyon in May, 2011.  Your timeline for drilling is accurate with what he told me.  He is the one negotiating with my nephew.  You mentioned a Brian Spall of Kenyon.  Have you opened discussions with Kenyon yet?  And when you talk about negotiating prior to expiration, do you mean to sign a lease early or discuss a new lease prior to expiration?

Permalink Reply by Todd on September 28, 2011 at 10:55am

Skip,

 

Yes, you can sign a new lease early with CHK via Kenyon.  But, if CHK holds your current lease, then I doubt they would want to sign early... However, I believe it is advisable to hold out until our leases almost expire until 1 or 2 months before expiration.  The fact that CHK was paying $2000 per acre only 2 months ago and now is paying $3000 per acre and that $5000 per acre was paid in Brooke county and now in Harrison County puts us in supreme negotiating position.  Also the fact that you have 130 acres and I have 75 acres.  Best thing we can do right now is wait!  Patience is needed in negotiating the best options in an oil and gas lease. 

Permalink Reply by Todd on September 28, 2011 at 10:59am

How were you informed of the lease acquisitions from one company to another?

Permalink Reply by Todd on September 28, 2011 at 11:03am

Jefferson County now has $4850 per acre with 19% GROSS ROYALTY on the table!

Permalink Reply by Shields Mayhew on September 29, 2011 at 2:09am

Is CHK offering this?   

Permalink Reply by Shields Mayhew on September 29, 2011 at 2:06am

A check showed up with a different name on it.  I would call and they would tell me they bought the leases.

Permalink Reply by Todd on September 29, 2011 at 2:33pm

Yes... CHK!  CHK also offering $5000 per acre with 20% Royalty in Harrison County.

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