East Offer

Well, I finally went with my gut and turned down the East offer of $1500/15/5. Compared to other leases, it's bad. Compared to what they offered the guy across the street last year, it's bad. I just had such a bad feeling about it, waking up at night, worrying. At least now I have peace of mind (but no money).

I don't know if my little farm will mean anything in this big play; it's not quite big enough to have a well of it's own, and unless East really wants me and is willing to offer a fair deal, I'm done with them. I just heard that PA is offering 10,000 acres of State Forest land in Delmar Township (north of Rt. 6, West of 287) up for lease in January; maybe that will bring in come competition.

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Replies to This Discussion

Permalink Reply by Wm. Robert Blackwell on March 5, 2010 at 10:04am
Posted on the main forum, but I guess I should have posted this here.

Hello all…. I own a small chunk of land (6.6 acres) in Tioga Co. PA. I thought I was to small of a landowner to get noticed by the gas companies, but last week I had a rep from Eastern Resources track me down and offered me the current offer of $1500/acre, 15% royalties and a term of five years. My question is where do I start? With only having 6.6 acres and the price they are offering (which appears to be firm) will it even be worth it after lawyer fees and taxes?
Permalink Reply by Lynn Wigglesworth on March 7, 2010 at 1:06am
That is East's standard offer. It will cost $150-200 or so to have a lawyer look at the lease, and the bonus will be taxed as regular income. You could probably get a no surface use clause on such a small property; if you get added to a unit, you'd have a steady flow of money coming in (maybe not much; you'd have to find a royalty calculator to figure out how much) with no disruption to your property.
Permalink Reply by Michael Karpiak on March 10, 2010 at 3:49am
What township are you in?
Permalink Reply by Wm. Robert Blackwell on March 10, 2010 at 3:54am
I am where middlebury and richmond come together.

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