Replies to This Discussion

Permalink Reply by Jim Harber on September 13, 2011 at 1:03am

Kristi, my fax 740-251-9021, I can review the lease and addendum's for you and reply today, my contact # 740-491-8709.

Permalink Reply by Dan on September 13, 2011 at 2:19am

I would like to look at it too Kristie. Fax - (866) 945-7907 Thanks

Permalink Reply by Dan on September 13, 2011 at 5:35am

Kristie, I read through the lease.  It is a set of addendums that will accompany and modify a boilerplate lease.  I have seen lots of leases now, and I would say that it is not that much better than you could get negotiating directly with a landman outside of a landowner group.  With a couple exceptions, it doesn't stack up well against the KWGD or ALOV leases, in the sense that it's not as protective of landowner surface rights.  It also appears to be an all-strata lease, as opposed to a Utica-only lease, which is ironic given the name of the group. It should be an easily marketable lease among the gas companies, which could partly be why it is acheiving such nice bonus and royalty numbers, although I think it is also because there are several large contiguous areas in their group. Anyone else have an opinion?

 

Permalink Reply by AT on September 13, 2011 at 5:56am

Dan, My understanding is that the 19% royalty is not gross and it a net royalty. Since you have a copy, can you confirm this?

Permalink Reply by Finnbear on September 13, 2011 at 6:15am

Dan,

Since I have not seen a copy of this lease, what specific areas of landowner protection are lacking?

Finnbear

Permalink Reply by AT on September 13, 2011 at 6:27am

Thank you Dan.

Permalink Reply by Kristie on September 13, 2011 at 12:03pm

Thanks for the help gentlemen. I trust your opinions more than others. Finnbear, I did fax you a copy. let me know if you need it refaxed.

 

Permalink Reply by Dan on September 15, 2011 at 1:07am

Yesterday I posted that the Utica Landowners Group Lease was offering a gross-royalty.  I deleted that post because I was wrong. It is a net-royalty lease.  Sorry I didn't read it close enough.  What is confusing is that there is paragraph after paragraph talking about the details of how all the different components of production, all the market enhancement, all the arms-length transactions aren't too affect the royalty, but there is the one line stuck in there that says,

 

 

The closer I read this lease the less I like it.  It is a great lease for a gas company.  It is very ambiguous on when bonus has to be paid, seems to allow for cherry picking of leases, easily allows for 1280 acre pools, has a weak ad valorem, weak horizontal Pugh clause and NO vertical Pugh or reservations, weak water clause, weak setback.  Personally I would never sign it, knowing that there are much more protective leases out there.

Permalink Reply by AT on September 15, 2011 at 1:25am

Dan, The 640 and 1280 are not contiguous acres either leaving #26 of the lease wide open. That is VERY important to us given most of us are sitting in the valuable narrow wet gas strip.

Permalink Reply by Aaron Resch on September 14, 2011 at 3:05am

I am having trouble getting a hold of the contacts, does anyone know where the signing is taking place and can I still get in on this offer?

Permalink Reply by Finnbear on September 12, 2011 at 2:28pm

$4900 and 19.75% is what I was told. Gulfport countered the XTO offer so XTO upped the ante.

Permalink Reply by Jim Harber on September 13, 2011 at 1:06am

I have a friend that has just 6 acres in Belmont County that got his lease last night, he said the offer was $4,950. and 19%, that is a very, very good price. I have not seen his lease and the addendum's yet, sounds like a good time to pull the trigger and go for it.

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