Comment

Comment by Peter Schueler on March 9, 2019 at 11:46am

T.B. You own the mineral rights when and if the lease expires. The lease continues beyond its expiration date if a well is drilled and production commences.  It is my understanding that mineral rights can be sold in whole or in part at any time whether the land is leased or unleased. Selling the mineral rights is a forever deal whereas leasing is for a specified period. You can wait for the lease to be drilled or expire or you can sell part or all of your rights. If the lease expires undrilled in 2020 you can release it for another lease bonus. Check your area for O&G production at the ODNR website and talk to your neighbors about their experience.  Whatever you do, assume that the first offer is not the best offer and check with an O&G attorney before signing any contract.

Comment by Al Cramblett on March 9, 2019 at 9:42am

Peter, Ray: That's exactly what happened with the Deucker drilling unit! A landowner with 34 acres had Chesapeake Holding their hands in the air. Chesapeake ended up paying an outrageous amount to lease that 34 acres.

Comment by ray schmidt on March 9, 2019 at 8:15am

thanks Peter.i will ask

Comment by Peter Schueler on March 9, 2019 at 8:05am

Ray, here's another thought. The typical bonus rates being offered today probably aren't for critical acreage like yours that could mess up a major drilling program. Maybe see if the royalty rate could be increased as a kicker.

Comment by Peter Schueler on March 9, 2019 at 7:26am

Chesie is scrambling to beat lease expirations on two sites, the Akers pad and the Kramer pad. They may not have two rigs available to start drilling on both sites at the same time. The Akers unit is a single 633 acre unit while the Kramer site has three units 429 acres, 437 acres and 270 acres. My guess is that they will target the Kramer site first with a drilling rig because of its larger acreage. Also, I haven't been contacted to extend my lease which lies within all three of the Kramer units.

Comment by ray schmidt on March 9, 2019 at 6:32am

well i just talked to him.he doesnt think they will go for it because they think current prices are lower than when we signd and they think they will be drilling by the time contract is expired.he is meeting with them monday so i will find out then if they accept my counter offer. thanks for pointing that out.will post monday when i hear from them.

Comment by T. Bamburak on March 9, 2019 at 6:26am

Hi, I'm confused - Chesapeake leased my li'l 10 acres in 2010, and renewed the contract in 2015. When the lease runs out in 2020, does Chesapeake retain the mineral rights? We've had no action on our land itself, so no royalties at all, but now Gateway Royalties wants to give us a chunk of change to "sell" them any future royalties. Can anybody school me a bit?

Comment by Peter Schueler on March 9, 2019 at 5:47am

Ray, If your ALOV lease is the same as mine the original 3 year extension was paid out at $750 per acre per year. Using that rate, a 6 month extension should pay $325 per acre or $7500 for 20 acres. I would counter offer $7500.

Comment by ray schmidt on March 9, 2019 at 4:17am

just got a call from rep. from chesapeake.they want to extend contract 6 months.we have just under 20 acers.they offered $4.480.65 flat rate to hold original alov lease.wondering if i should take it?any suggestions would be appreciated

Comment by Al Cramblett on March 5, 2019 at 7:27am

All this Is a result of the  two $8 Billion cracker plants Proposed  in the Ohio River Valley. The first plant is In the process of being constructed in an area close to Pittsburgh. The second plant is cited across the River in Ohio. These plants require natural gas liquids as feedstock, the most important Product being ethane which is used to produce plastic. Plastic production and molding will become the new manufacturing Boom in the area!

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