I am in Liberty township and a few months ago got an offer to buy my royalties for 1500 to 1800 per acre, but they would do a more in-depth look if I was serious which "mite change the numbers" slightly....even tho I am not drilled or receiving any royalties ..talked to a landsman rite b4 I contacted them and he advised caution as there will be "significant" activity in my area in the "near future"....how about it, anybody else get an offer or hear anything or see any activity here in Tioga Co. ?
Try 3k in good area if good Royalty %. Marginal area no buyers. HBP'ed leases could be many years until you get more than the 5 per acre shut-in per year. Unleased in good area add 1-1.5k. Unleased in marginal area is going to stay unleased for long while. There are OGM's for sale with local realtors for 2-3k. I am sorry to have say this but this is the reality of the situation. Last months Swepi Royalty $1.46 per MCF. Anyone willing to pay 8-9k per acre I happily will sell unleased OGM's in Multiple townships of Tioga Co.
What OGM's are worth and what an asking price or offer may come in at I suppose will always be a revolving door. With all the proven gas reserves here in the North East (Marcellus, TBR, Utica ect) you'd think these right would be worth a small fortune but all this gas is a double edged sword because of supply and demand.
I remember the first offer I ever received to lease was for $10/acre. 4-5 years ago I was juggling offers of around $3k/acre from 2 companies to lease not even to buy. Now folks are getting offers of $2-3K to buy all their rights. I'll never sell my OGM's but the chaos of it all intrigues me,.
Remember that when you buy you're using post-tax dollars, whereas the money you get for leasing is pre-tax. I'd say that the premium for quality unleased OGMs is only about $500/acre right now since you will only keep about 1/2 of the $1,000/acre Shell is likely to pay you after taxes. And old leases often have higher royalties than anyone offers now, and in that case the premium shrinks further. Otherwise, I agree with your opinion on this completely. It's a true buyers market at present.
From the Pittsburgh Tribune-Review:
Construction has begun on a long-delayed $780 million natural gas-fueled power plant in South Huntingdon that has drawn fire from environmentalists and neighbors almost since the day it was proposed in 2009.
In those seven years, regulatory hurdles, threats from opponents and a weak market for selling electricity have caused Nebraska-based Tenaska Inc. to delay plans to build the plant on 50 of the 400 acres it owns south of Interstate 70 near Route 31.
But on Tuesday, Tenaska spokeswoman Timberly Ross wasted no words in announcing that the project, which received its final air quality permit from the state Department of Environmental Protection this year, has received full financing and is finally under way.
“It’s a go,” she said.
Two natural gas- and one steam-powered turbine will be built at the plant, expected to generate up to 925 megawatts of electricity, enough to serve 925,000 homes along the East Coast, company officials said.
As many as 30 workers have been at the site for the past several weeks preparing the property for construction.
Tenaska officials estimate 300 construction jobs will be created to build the plant over the next three years. About 25 full-time employees will be hired to operate the plant once it is completed in 2018.
“Tenaska typically encourages its contractors to hire and contract locally, whenever possible, and that commitment continues at Tenaska Westmoreland,” said Vasu Pinapati, engineering and construction project director.
Westmoreland County officials said the project will provide a multifaceted boost to the local economy.
“Any project like this is going to be good for the county. They committed to employing county residents for the work,” said Commissioners Chairwoman Gina Cerilli.
Commissioner Charles Anderson said he was glad to see the project finally get off the ground.
“I see this as a bright spot for Westmoreland County. It’s exciting, and I’m glad they finally pulled the trigger,” Anderson said.
County Planning Director Jason Rigone called the power plant the county’s largest construction project in recent years — and one that is needed.
“With the closure of coal-powered plants in southwest Pennsylvania, we needed to replace the loss in megawatts. Now this clean-burning natural gas plant will certainly help,” Rigone said.(2)
(1) Tenaska (Apr 19, 2016) – Tenaska Closes $780 Million Financing for Natural Gas-fueled Power ...
(2) Pittsburgh (PA) Tribune-Review (Apr 19, 2016) – Construction begins on $780M South Huntingdon power plant
Here’s a report from top energy law firm Steptoe & Johnson:
At a recent Congressional Call-Up organized by the Independent Petroleum Association of America (IPAA), participating company representatives were briefed by IPAA staff on key federal issues impacting the oil and natural gas industry. The thrust of the briefing, which would be the nucleus of our comments delivered to members of Congress later that day, focused not on any one issue but rather the significant number of actions underway within the federal system. These actions were current agency proposals that had been listed in the Federal Register as either proposed or final and would in one way or another affect the oil and natural gas industry.
The list of separate actions totaled 44. Agencies identified on the list included the Environmental Protection Agency (five separate actions), the Bureau of Land Management (nine separate actions), the Fish and Wildlife Service (ten separate actions), the Bureau of Ocean Energy Management (five separate actions), the Bureau of Safety and Environmental Enforcement (three separate actions) and the Pipeline and Hazardous Materials Safety Administration (five separate actions). Throw in the White House National Ocean Policy rule, the Office of Natural Resource Revenue, the Forest Service, the Security and Exchange Commission and Occupational Safety and Health Administration and we were looking at a well-planned attack on virtually every aspect of oil and natural gas planning, production and use. The proposals include both onshore and offshore requirements and cover air, water, threatened and endangered species, pipeline integrity, oil and gas transportation, hydraulic fracturing on federal lands and more.
Additionally, we understood that most, if not all, of these proposals were on a fast track to be finalized and implemented as part of the Obama Administration’s legacy of disdain for fossil fuels. While some of these individually would have a minor impact on current industry practices, others will significantly change and/or restrict how industry operates and collectively, all these actions will have a dramatic impact on the production of oil and natural gas in the United States.
Company representatives later reported that nearly all the members of Congress that were approached expressed an awareness of this late term effort by the Obama Administration, although most were surprised by the sheer number of actions underway. They acknowledged that Congressional oversight and intervention may be the only way to impact and slow some of these actions.*
*The National Law Review/Steptoe & Johnson (Apr 19, 2016) – Federal Agencies’ Assault Oil and Natural Gas Industry
Kinder Morgan said Wednesday it has suspended work and spending on a controversial proposed pipeline that would have transported shale gas from Pennsylvania to New England.
The reason: Kinder Morgan and its subsidiary, Tennessee Gas Pipeline Company, did not receive the level of contractual commitments it expected from customers in the region, the energy company said in a statement.
The proposed $3.3-billion Northeast Energy Direct project would have comprised 430 miles of pipeline running through New York to Massachusetts and New Hampshire to supply the Northeast U.S. with natural gas.
“Unfortunately, despite working for more than two years and expending substantial shareholder resources, TGP did not receive the additional commitments it expected,” Kinder Morgan said of the project, which was originally authorized by the company in July 2015.
Several factors caused the insufficient commitments, according to the company.
First, New England states did not have regulatory procedures to facilitate binding commitments from local electric companies. Second, a low-price energy market, “while good for consumers,” Kinder Morgan said, made it difficult for producers to make long-term commitments.
The pipeline had been greeted with stiff opposition from politicians, such as Massachusetts Sen. Elizabeth and Vermont Sen. Bernie Sanders, as well as environmentalists and local residents who live close to the pipeline’s proposed route.
Kinder Morgan said Wednesday it “remains committed to meeting the critical need for constructing additional natural gas infrastructure” in the Northeast and will work with local parties to explore alternatives.(1)
Junior Massachusetts Sen. Ed Markey celebrated the announcement, noting that he has opposed the pipeline over concerns of its potential impact on local communities and climate change.
“Using New England as a throughway to export U.S. gas to overseas markets might be good for the bottom lines of pipeline companies but it could raise prices and be a disaster for consumers and businesses in our region,” Markey said in a statement Wednesday.
“We need to build on the work that we have done in New England to move to a clean energy economy,” the Democratic senator added. “And we should create jobs in New England by working smarter not harder when it comes to using natural gas through increasing efficiency and repairing and replacing our aging and leaking natural gas distribution pipeline infrastructure.”(1)
“This is what I’ve been hoping and praying for, for more than a year, that this might actually happen,” said a jubilant Holly Lovelace. “That they would go away.”
Lovelace lives on Gulf Road in Northfield, not far from where a large-scale gas compressor station was expected to be built to help push 1.2 billion cubic feet of natural gas along a proposed 30-inch diameter pipeline, the Northeast Energy Direct, each day.
But on Wednesday, Lovelace received the news she and hundreds of other area residents had been hoping to hear for the better part of two years: the project has been suspended “in its current configuration,” according to energy giant Kinder Morgan, the pipeline’s Houston-based developer.
Ben Clark of Clarkdale Fruit Farms in Deerfield, who has criss-crossed the state to testify before state legislative and department hearings in his efforts to prevent the pipeline from being close to his family’s 100-year-old orchards, let out an audible sigh of relief while discussing the announcement with a reporter over the phone.
“It’s amazing. Our family is overwhelmed and overjoyed,” he said. “We’re happy to be on the winning side with so many of our neighbors and other committee members who’ve opposed this all along. We’re glad they finally got the point.”
Deerfield Selectman Carolyn Shores Ness, who lives on the pipeline’s proposed path and who has been involved with a volley of town legal actions to halt the project in one way or another, expressed relief at the news, but vowed to continue working to build a case against the project should it be revived at some point.
“I’m so excited and thrilled, I can’t even say enough. There are no words to express it,” Ness said. “But we can’t let down our guard, can’t give up the fight. We have solid legal arguments that we have to pursue,” she said.
Maple sugarer Dana Goodfield of Stonegate Farm in Conway was delighted to hear news.
“Wow! Obviously, we’re very happy with that — because it was slated to go through our sugar bush.”
A few miles away, in Ashfield, Will Elwell was on a tractor, tilling a field, when his wife, Donna, called out to him: “The pipeline is dead.”
“I’ve just come in to read it online,” Elwell said Wednesday afternoon. A few weeks ago, Elwell had built a replica Henry David Thoreau cabin directly over the pipeline route, as an act of protest against a pipeline that seemed on a course against the will of the landowners involved. Dozens of residents had helped him build it, including two of the town’s Selectboard members.(2)
“That New England project going offline is concerning,” Charlie Smith, chief investment officer at Fort Pitt Capital Group, said in a telephone interview. “All they’ve talked about is the huge arbitrage between Marcellus Shale gas as some of the cheapest in the world and Northeast electricity being some of the most expensive. Unless I’m missing something, this should’ve worked.”(3)
(1) Boston (MA) Herald (Apr 20, 2016) – Kinder Morgan suspends work on Northeast Energy Direct gas pipeline
(2) Greenfield (MA) The Recorder (Apr 20, 2016) – Locals cheer suspension news
(3) Bloomberg (Apr 20, 2016) – Kinder Cancels Gas Pipeline, Demands Collateral as Slump Deepens
Anyone know what the average well depth in Delmar and or Tioga County is for:
1.) Marcellus Vertical well
2.) Utica Vertical portion
Okay thanks David