Replies to This Discussion

Permalink Reply by 2s72s0k9mm8gd on October 26, 2011 at 3:21pm

Any word on royalty or they still offering 15% no deductions? Would like to know as I have friends in Perry Twp. who would be interested.

Permalink Reply by D. C. Summerville on October 26, 2011 at 3:25pm

That is correct. 

The new offer in Lawrence County from SWEPI (Shell) is $3,250 per acre upfront (bonus) money and 18% royalty. 

Disclosure:  I am Dan Summerville, an Independent Landman working for Long Consulting Group and leasing land in Lawrence County for SWEPI.

Permalink Reply by Rick Cancelliere on October 26, 2011 at 3:33pm

18% net at the well with no deductions? Or 18% gross?

Permalink Reply by D. C. Summerville on October 26, 2011 at 3:44pm

Gross.

Permalink Reply by Rick Cancelliere on October 26, 2011 at 3:52pm

Well if the spread was 17 Gross & 15 Net before, will Shell go 18 Gross or 16% Net now?

Permalink Reply by D. C. Summerville on October 26, 2011 at 3:58pm

It was 15% gross prior to it being 18% gross now.  As to if SWEPI would offer a 16% net royalty, I don't know.  I can find out if it is possible and get back to you, or, you can ask the question yourself by calling the Shell field office in New Castle at 724-202-6422.

Permalink Reply by Bob Moran on October 27, 2011 at 1:05am

 Rick - It gets a little confusing, but as a landowner I want the royalty to be gross. This means I'm getting my % before any cost of production deductions are taken out by the O&G company. 

Permalink Reply by Rick Cancelliere on October 27, 2011 at 1:34am

Well, look at it this way. If you do not have any language in you lease to protect your situation you could be subject to processing charges, transportation charges and marketing charges. The list could be endless with legitimate fees associated with the gas once it is out of the ground.

I am not an attorney. My best advice for anyone is to seek the council of a attorney who is well versed in this area of the Law. Many will say they can help, but unless they understand the industry they will miss something that is very obvious to an other.

 

Also, read, read, read.

 

Sorry I don't mean to preach.  

Permalink Reply by Bonnie Hafer on October 31, 2011 at 5:34am

I am in the process of negotiationg a lease with Shell.  We are at odds on two points.  One is the right of first refusal at the end of the primary term.  The second is their paragraph on "Continuing Operations"  I wanted the addendum to state the lease is kept in force only if gas is being produced in paying quantities at the end of the primary term.

 

Is there anyone who has a signed lease with Shell containing any of these provisions?  If so, could I see the wording?

Permalink Reply by Lana Boyer on November 2, 2011 at 12:42pm

  What ever you negotiate....remember this lease will more than likely be a lifetime!    If you plan to sign you should not be leaving any unanswered questions to be answered by the land man.  If you currently own your mineral rights make sure you explore your options.    I have arranged two land owner meetings in Lawrence County.  Nov 10, Wayne Twp Fire Hall at 6:00P.M. in Ellwood City.   Mahonning Twp, Rt 224, Hillsville, Pa

on Nov 14 at 3 & 6 P.M.   There is a lot to know, so come and listen!  There is a lot they don't want you to know!