Replies to This Discussion

Permalink Reply by 015334grltd9m on September 24, 2011 at 1:58pm

I do not understand your comment that royaly is 300 per mo., you only get royalties if a well is on the property.  If you are speaking of a Clinton well then it is not relative to the $1500.  If you mean the offer is to buy your mineral rights, then I believe it is for the deep rights, this is why the buyer is interested.

Permalink Reply by Jack on September 24, 2011 at 2:39pm

Ron, I currently get 300.00 (12.5 %) per month from two clinton wells on my property. The current lease was signed in the late 70's and NCL now holds the lease which I'm sure is for all depths.

Permalink Reply by Janice Lanphere Hancharick on October 19, 2011 at 5:31am

I'm betting that someone within the company wanting to "buy" has done considerable homework.  There must be a loophole somewhere in your lease (or perhaps the depth is restricted) that has them interested in buying your AC.  That being the case, alot more $$$ should be in that offer.  Time for you to reread that lease and/or take it to an attorney who knows the gas business.

Permalink Reply by 015334grltd9m on October 23, 2011 at 12:32pm

Jack if you still need help give me a call 330 707 9688

Permalink Reply by Tina B on October 24, 2011 at 11:09am

That sounds about right. They are offering to buy the mineral rights. They pay you 1,500 an acre now and sit on it until they drill for the deep stuff. You get the cash now but you lose the ability to ever collect the royalty on the deep stuff (and the 300 a month). There are a bunch of companies that buy and sell "royalties" (really the mineral rights) - just look at the ads on the right of the page! When you are a Texas billionaire 135k is a small investment. I agree with Janice, maybe shopping it around is a good idea. I've also seen people sell 1/2 of their rights or 1/3 for cash and keep the rest for later. Good luck!

Permalink Reply by Jack on October 30, 2011 at 5:47am

They uped the offer to 150K but Im still not selling. I think in a few years I would be getting alot more money.

Permalink Reply by Janice Lanphere Hancharick on October 30, 2011 at 6:57am

Jack, the company is betting you have a "tipping" point.  Those people OBVIOUSLY know what's below your feet!  Tina has a plausible idea ... i.e. agreeing to sell 50% ,but first look into having a top-notch negotiating firm set up a leasing agreement that you can live with to protect your surface acreage, gain some added benefits, and ensure a steady gross royalty income  during the production lifetime of the well(s).  With $$$ like this being offered you, drilling is definitely on the company's mind.  A split deal like I just described would get you $$$ now and into the future, AND split the tax burden on one large lump sum.

You haven't said if you're in one of the OH/PA border counties, but I do know a firm that's sealing great deals for its clients right now along that fairway ... joint groups that will be capping their action by January.      jlhanch@nc.rr.com

Permalink Reply by Jack on October 30, 2011 at 7:19am

Thanks for your reply. I am in Milton township. Mahoning county

Permalink Reply by Jack on October 30, 2011 at 12:32pm

Thanks for the info Joe. I just got off the mineral buyer again. They are willing to pay more but im still pretty sure im not going to sell. Did you once own land on Duck Creek Rd. Joe?

Permalink Reply by Janice Lanphere Hancharick on October 31, 2011 at 3:32am

From my sources, professional not diner talk, companies are leasing both shale layers, but are currently interested in developing only the Utica.  Reason?  $$$$  Both a Marcellus and a Utica well can be drilled off the same wellpad (and are in some areas), but  market prices determine what shale layer goes into production first.  OH Utica is rich in condensates/oil, and oil brings in more $$$ than natural gas right now.

To answer your question the target formation is whatever commands the most profit at that moment.  Both shale layers will be produced eventually. 

Permalink Reply by Corey Hendricks on November 10, 2011 at 8:55am

I think Janice hit the nail on the head! In Mahoning county as with most portions of eastern Ohio the theory now seems to be reach down and grab the oil form the Utica and then when Nat gas prices/demand increase and the Utica is spent  plug back and drill horizontal in the Marcellus, save them from and extra vertical shaft if they can get the production they need through it. It seems the Marcellus is  potentially profitable/viable in our area as the bulk of land/drilling costs have will be absorbed by the Utica.

Permalink Reply by 0i7okn54zwbdo on November 20, 2011 at 5:09pm

This is misleading. The Marcellus is currently not profitable at $3.50 MCF. The Utica in Mahoning is still unproven (the one completed well isn't producing) and liquids will fetch about $60/bbl. To pay back the $9,000,000 that it costs to drill these wells in two years the company will need to average 205 bbl/d. Assuming an 80% decline in two years production would be around 180-200 bbl/d. If the decline in year three is too steep then these things will not be profitable. It's nice to be optimistic but the numbers need to be proven by science before this thing has real legs. But I agree in general, don't sell 100% of your mineral rights for ANY amount of money.

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