I attended the Kick-off meeting last night, April 12, 2012, during which the eCorps offer was presented to the landowners. While there is much clarification still outstanding on how the "lease deal" will be structured, the offer, as I understand it, is for the landowners to receive the NY State minimum 12.5% royalty share of all minerals plus a 2/3 share of a new LLC company that will own the remaining 87.5% of the royalties with the other 1/3 share will be owned by eCorps for which eCorps will "developed" the land to establish what gas reserves are available so the land can be marketed to perspective buyers like Chesapeake, Exxon, Shell etc..

A scenario was given that after exploration and gas reserves are proven, the mineral rights can be possibly sold for $3,000 an acre out of which the land owners, with 2/3 share of the new LLC, would receive $2000 and eCorps would receive $1,000. Obviously the scenario is just that and not the actual future outcome. 

Bottom line is that the land owners are being asked to accept 12.5% royalties which is the state minimum which by now everyone should know that the state minimum is a rip off with some states considering legislation to set the minimum at 15% or higher. Yes natural gas prices are at a recent all time low but as demand picks up from industry to take advantage of the low prices, higher price will follow and again get to the expected $4 plus in the next few years.

The royalty that landowners should be insisting on is what the two year ago offer was, 20% in nearby Little Meadow PA and 21% in Herrick Center PA, and both of these offers were backed by a signup bonus and not a carrot into the future that might never materialize. While the current market is not supporting the signup bonus of $5,500 received by Friendsville Coalition and even higher for coalitions in the Scranton and other areas, non-the-less, once the NY State DEC completes its review of the Environmental Impact Statement and issues guidelines, the offers experienced in PA a few years ago will be also return to the Southern Tier.  

Gas wells are not being drilled and depleted in a few yearsand all gas reserves sold at the $2 recent price, the life of the well goes on for 30 plus years and if one considers formations other than the Marcellus, like the Utica and Trenton Black River, the land owner is looking at a legacy of royalty on their mineral rights that can be handed down to generations. Why give your mineral rights away for pennies on a dollar. Gas will not stay at this low level for ever. The cure for low gas prices is "LOW GAS PRICES", that is what will provide industry and the consumer to incentive to increase consumption.

Do not accept 12.5%, it's too low and a rip off, and insist on upfront bonus payments not promises.