Comment

Comment by warjr on July 11, 2012 at 2:34pm

Dave, neither am I and that is why I will hav an expert review the lease from top to bottom.  I really like some of what I see and I have seen a ratcheting up of offers on my place from some whacko offring $300 an acre a year and a half ago who also told me that nothing was going to be happening in the area of Crawford County.  Since then I have had teo offers, one @ $2000 an acre with 18% royalties and now this one at $3900 and 19%.  Quite a difference and shows that NOTHING is going to happen in Crawford.  I have a number in mind and when it comes I will sign as I am 60 years old and with 75 acres quite a nice chunk of change.  Hoping to preserve our hunting camp (the 75 acres and house & equipment)) by putting a good chunk away in a trust to maintain the property for future relatives use within our family.  Also talking with a tax planner and financial planner as well.  I would advise all to do the same before signing anything!

Comment by Dave on July 11, 2012 at 2:28pm

Warjr, If you look at the last 2 pages of the lease.  There is a clause in there saying no gas storage for any reason.  Its on the addendum pages in the back.  I'm not expert on gas leases though, so you may be right.  I dont know

Comment by warjr on July 11, 2012 at 2:16pm

pg 1  LEASING Clause:   to use or install roads, electric power and telephone facilities, and to construct pipelines with appurtenant facilities, including data acquisition, compression and collection facilities for use in the production and transportation of products from the Leasehold or from neighboring lands across the Leasehold, to use oil, gas, and non-domestic water sources, free of cost, to store gas of any kind underground, regardless of the source thereof, including the injecting of gas therein and removing the same therefrom: to protect stored gas; to operate, maintain, repair, and remove material and equipment.

Comment by Dave on July 11, 2012 at 1:47pm

Rex, Yeah i'm looking for a good gas and oil attorney right now to review the lease.  I'm not in need of money right now but a big amount like that would help anyone. 

Warjr,  Are you sure there isnt something in the addendum saying they can store or do pipelines with out payment? 

Comment by warjr on July 11, 2012 at 1:45pm

Again, my question to anyone is what ar the feelings on future natural gas being stored under your property and pipeline access across your properties with no payments for such?  This is part of the Appalachian lease agreement that I have and reviewing.

Comment by rex roae on July 11, 2012 at 1:01pm

Dave, if that's the case, I might be right behind you.  

From my perspective, $3900 an acre on top of 19% royalties would be hard to turn down.  Especially considering my area in the shale play and what others in more rich gas areas got.  Need a good oil and gas attorney to review the lease to make sure everything is kosher.

Maybe they go up to $5k an acre in the future but I'd rather take the safe and sure play if they want my land as part of this offer.

Comment by Dave on July 11, 2012 at 11:59am

Rex,

I just sent him an email asking about retaining the shallow rights.  And that lease has 19% no deductions.  If you read the addendum in the back it tells you no deductions.  I'm really leaning towards signing with them, because i'm not seeing an action going on with any landowners group.

Comment by Michael Walentosky on July 11, 2012 at 2:52am

Appalachian landowner services is active in Venango County. I know one of the land agents personally. Very high integrity. Landowner friendly lease, good addendums. Very competitive royalty, no deductions, good bonus.

Comment by Sam Douglass on July 10, 2012 at 2:48pm

lISTENING IN ON GOSSIP

Hi Quincy,

   Both of us see the glass as "half full"! Way back last summer when CHK announced the first results, Mr.McClendon said at their 2nd Qu. analyst's call "The Utica is similar to, but economically superior to the Eagle Ford". In my opinion, none of the O&G companies (such as Enervest) have released anything contrary to CHK's initial report. In fact, all seem to confirm his assertion, especially those with wells drilled. Gulfport had similar things to say at their 1st Qu 2012 analysts' report.

   The wild card is oil & NG prices and international politics. I believe the medium to longterm outlook is rosy, especially with exports, utility fuel conversions and transportation fuel conversions all moving forward.

BluFlame

  

Quincy,

Please send the link to the latest production numbers on the CHK website.

Gayden Parker

That chart doesn't represent $/acre to landowners.  That is a transactional line, meaning it covers the prices paid for acreage that is leased or HBP.  So if a company wants to buy a bunch of CHK leases and acquires an overall 80% NRI for $25,000/acre they are paying $312.50 per acre per point.  So a lease with a landowner with a LOR of 18% puts the value at $5,625/acre.  That seems in line with a lot of the numbers we've seen for leases over the last 6-8 months.  

CHK's average lease cost in the Eagle Ford is $2,200/acre.  The Point Pleasant has already eclipsed that.

What would you think Unleased Utica Land Is Worth to Sell Or Buy Per Acre? Taking In consideration the lease bonus money, and long term royalties from wet gas and oil?

That's a good question.  I can't give a good answer on the entirety of that as surface prices vary pretty widely.  I'm in Mahoning county which has traditionally had much higher land prices than say Columbiana or Jefferson.  If you figure unleased land, untillable, in Carroll county would fetch ~$5,000/acre for a lease bonus, maybe $2,000/acre for surface use and another $9,000/acre for royalties you have a price of $16,000/acre.  But that assumes quite a bit about the royalty payment and the underlying production.  If someone is buying land for the potential royalty they're doing so on speculation and should be given a discount at the sale.  If I'm buying an asset for investment I'm not planning on paying it's potential market value.  So my answer is I have no real answer.  Sorry.  

Comment by Sam Douglass on July 10, 2012 at 2:45pm

http://storage.ning.com/topology/rest/1.0/file/get/35533794?profile...

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