Replies to This Discussion

Permalink Reply by Lynn Wigglesworth on July 14, 2010 at 3:05am

I think a lot of people are anxious to see what happens. The Friendsville group auction last year really raised the bar for offers in that area (I don't remember the terms, but something like $5700/15% ?, plus a landowner-friendly lease). It would be nice to see better bonuses and leases come to Tioga Co., but it still might not be as good as some individual offers we've been seeing. My prediction would be $2500/15% for the auction. I'd like to be proved very wrong on that.

Permalink Reply by Greg Sovas on July 14, 2010 at 4:15am

Lynn, I think (and hope) that you will be very wrong. TTLC will have over 8,000 acres in the lease sale in Tioga which is very substantial given the level of exploration and development in the County. While we have not marketed to the gas companies waiting for the final tally on July 15, I can tell you that we have received some very good, unsolicited interest from gas companies in anticipation of the deadline. As you know, we have advised our landowners to expect higher offers and more pressure from companies in anticipation of the sale. That is what is happening, and we have advised our landowners to wait for the sale. Finally, we will set the royalty rate, and it will be higher than 15%. While I don't want to engage in speculation, I felt I had to respond to your reply to Josie. Hope I have given you hope.

Permalink Reply by Brian V. on July 14, 2010 at 5:00am

8000 acres is a nice chunk and would be a great pick up by any gas company. However, there is more to any lease deal than the numbers. If this 8000 was all contiguous it would be much more attractive. From what I've heard most of the 8000 acres are in the northern half of Tioga and not contiguous. Also, while ERI/Shell is the main operator and lease holder in Tioga County it would be interesting to see the kind of interest other companies would have in picking up pieces here and there with the occasional big chunks thrown in.

I've sat through the TTLC meetings and the intentions are great. I'm sure the lease will be sound, however most off my neighbors are leased for 1-3 more years and given the way PA is currently set up I fear I may end up with just lease $ and never any royalties. At least not in my lifetime.

Comparing the Friendsville deal and this is like night and day. The friendsville deal was for much more acreage, mostly contiguous, and in the heart of the Marcellus shale "sweet spot". I think Lynn will be in the ball park with her guess-ta-mation. $2500-$3500 with an 3 year extension for the same and a royalty 18-20% would be realistic. Not bad really considering what is being offered to some in Tioga Co.

I just want to be unitized. If I can get a new lease at 20% and just about any bonus I would take it. I've been hearing some great royalty numbers. I just have got to figure out which company actually owns the other leases around me now. Last I heard it was ERI/Shell, but these companies are movers and shakers so who knows now.

Permalink Reply by Lynn Wigglesworth on July 14, 2010 at 7:51am

I wonder how many properties are like mine: surrounded by East-leased land, and not worth much to anyone except East. I'm hoping that someone will pick up my property with a good lease, then trade it to East...it's the only way I will win. I suspect there are a LOT of people in Tioga Co. in my position, given all the land that East has leased.

Permalink Reply by Lynn Wigglesworth on July 14, 2010 at 7:45am

Greg; Thanks! I hope you are right; good luck. East has been dominating Tioga Co. and keeping bonuses and royalties low for so long....

Permalink Reply by Ann Ticopa on July 14, 2010 at 6:56am

Beats me, but I am definitely interested in seeing how it comes out. I was hoping the Coalition would have a draft of their no entry lease available before the end of signup, but it looks like it won't be.