Has anyone heard about the new gas pipeline that is being planned to run along the top of the county from about one end to the other? Some landowners were contacted about it a week and a half ago.
Concerning pipelines in northern Sullivan County, I was contacted within the past week by Chesapeake gas line employees for permission to access my Elkland Township property. I was told that Chief has contracted with them to expand Chesapeake transport lines from the Overton area to Sullivan County so that Chief can drill some wells on properties whose leases are set to expire in as soon as three years. I have the Chesapeake names and phone numbers. The plan is to run a line north and south, towards Estella, and to run a second transport west towards Camp Brule and the adjacent State Game Lands. I was informed that Chesapeake transport line engineers were to meet yesterday (Thursday) to walk a specific sullivan county farm to finalyze the route oth the north/south line through that farm. This is all just west of the Lick Creek area, just south of the Bradford/Sullivan County border. The Chesapeake employee did not know when line installation would begin. He stated it could be this summer or this winter, but he didn't know anything other than that one specific, large farm was having the route finalyzed on Thursday. Hope this is informative.
I received an "Offer to Purchase" letter for our mineral rights from MC Minerals Co. for $4,800 per acre. I contacted our lawyer in Williamsport to see if it was fake. He informed me that it was a real offer and a lot of money.
Has anyone else received a document like this recently?
Jim
It is my understanding that you keep the "Bonus Money" but all royalties go to the company buying your mineral rights. It's a one time payment made shortly after the agreement is signed (you don't have to wait for the drilling process to begin). If the royalties exceed their payment to you - they win. If the royalties are less than the payment - you win.
James,
Certainly everyone has to make up their own mind. But unless someone is in a real money bind it is common sense not to sell them away. James McDonald said he was offered $4,800 per acre. The current return per month per acre is around $600 an acre with only one well in the unit. The first two years are the best so lets times that by 24 months and that is $14,400 per acre. Let's say that your unit has 6 wells then that is $86,400 per acre per month. If you are in it for the long haul then certainly the well rates drop perhaps as much as 70 percent so then it would be $180 per month per acre per well. That is if the price of gas does not go up. Also, if a person sells their rights someone else calls the shots on your property. It would be a greater long term gift for an older person to will their children or grand children the mineral rights.
You might want to check your source on the $600 per acre royalty figure. In a typical 600 acre unit with a 15% royalty and a $4 gas prices the well would have to produce around 20,000,000 MCF/day to pay out $600/acre. This is almost twice as high as the best PA well's announced monthly production and the amount would decline every month. By the 13th month the production would be less than half the first month and continue to decline although to a lesser degree every month. Average monthly royalties for the first year of a single unitized well are more likely less than $100/month range but this too depends on a lot of factors including royalty %, gas price, the particular well and unit size. I agree that in general and certainly with a lack of good information it does not makes sense for most people to sell their rights, but there are many situations where a party able to make an informed decisions may well consider it. $4,800 per acre may be a great price or a poor one depending on the property and owners circumstances. Full disclosure - I am actively buying mineral rights. I live and grew up in Lycoming county and believe it is important to provide owners good information to help them make a decision.
Everything I have heard from Bradford county is that $1,100 per acre is the "average" 20% royalty payout over 20+ years. Anyone thinking of selling their mineral rights would have to be in dire straits. Anyone that is not being offered $5,750 for lease with 20% royalties with some (about 15) fairly good appendix clauses is getting ripped. Anyone trying to buy rights is trying to make money off of Sullivan county landowners. No insult intended Scott, but no one has talked about 15% royalty for almost a year now. $4,800 an acre to sell rights is $1000 below what Chesapeake is offering to lease...don't sell your rights unless your sister needs an operation...this afternoon.
When is someone going to start a landowners group for Sullivan? There still are almost 1000 landowners who haven't signed a lease yet...
Mark,
No offense taken. My use of 15% was meant to be a conservative assumption in discussing a mineral sale. I assume the property was already leased and most existing leases (signed before 2008) are at 12.5% royalty and it looks like most will get drilled with no opportunity to get a higher royalty. You are absolutely right that a 20% lease is worth more than a 15% lease. I can't speak for others, but I definitely hope to make money buying mineral rights, why else would I do it? Any seller should be careful to learn as much as they can and to understand the potential value of the mineral rights before considering to sell them. It is particularly important to discuss your specific situation with someone knowledgeable who can help interpret all the variables and make comments on the your actual position. I am not involved in the transaction discussed below in anyway. The only reason I commented is to point out that in my experience the assumption & math presented did not seem correct.
There are many considerations to digest. One such consideration is that, per Lester Greevy, mineral rights expert and gas attorney, less than 18% of Pennsylvania property owners with land in a gas play have seen 100% of their property in the gas field. This is most times overlooked by folks figuring to make a lot of money. Sometimes it is to the land owner's advantage to accept a nice offer from a gas company prior to seizmic testing, which could lead a potentially interested gas suitor to pass on your property, because seizmic results show it's not a core parcel of land. This will be an industry that could continue for 100 years. The drilling now is limited to sure bet sweet spots - the low hanging fruit if you will. Thus the 18% figure.
Has anyone been contacted by Texas Corporation. A ex landmen called and said this company is now leasing in the area and giving considerable more money????
I attended the meeting. The first twenty minutes was a public relations primer concerning how wonderful Chief is. Chief had several knowledgable staff in attendance, in particular their water quality expert. They did a good job trying to answer everyone's questions, the bulk of which centered around safety and environmental concerns. I had three questions I wished to be answered, and they were. Chief is voluntarily casing all future gas well bore piping with oil well grade cement. Chief is agressively drilling in Sullivan County over the next year or two so as to drill as many wells as possible before their leases expire. They do not necessarily plan to bring the wells into production. Rather, they want to excercise their rights under existing leases and not have to pay a second time to release property. Many of the drilled wells will be capped, or moth balled, until such time as gathering lines catch up to the drilling. Third, potential drilling areas in which they hold leases containing pockets of land owners unreceptive to gas drilling and refusing to sign leases are the least likely (lower priority) potential drilling areas. Two other worthwhile pieces of infomation to be unveiled - they plan to hit the Sonestown and Muncy Valley areas hard. This area dovetails with a concentrated or mature area of effort for Chief in eastern Lycoming County. This area will see their gas transported south to the interstate pipeline in Lycoming County. They also have some plans for Fox, Forks and Elkland areas, but theses plans appear less aggressive than the aforementioned and the gas will flow north to the Tennessee pipeline in Bradford county. They also work freely and closely with Chesapeake, and develop together.
I thought the folks of Sullivan were very professional in their conduct and fair but firm in their questioning. Folks can be proud. Probably 75 or more folks attended. Several folks in the audience exhibited an anti gas bias, and interrupted eight to ten times to express personal opinions or hypothetical questions. The presentation group handled the situation well.
In summary, a fairly strong consensus was exhibited that the folks of Sullivan County take pride in their county's uniqueness and don't want it destroyed, even for money. On the heals of the BP fiasco, there was a healthy dose of scepticism with respect to Chief's assurances.
I am part of a group who owns several hundred acres in lower Colley Township near Frost Hollow. We are very receptive to drilling and pipelines. I hope a few don't ruin it for the many who welcome drilling. Drilling done responsibly will be great for the county and region. We need natural gas. Better US gas than foreign oil.
I, and several others, own smaller co-joining parcels and are interested in leasing either separately, together or joining a "group". We are trying to gather info and get "in touch" with others in Davidson Township who have yet to sign a lease; with ones who know and/or are working the process. Chief and Chesapeake have both contacted several of us and presented "contracts". The "seismic" guys from Tidelands Geophysical have verbally indicated positive results are expected and stated the parcels not leased are considered "window tracts". I have perused the 23 May read mentioned by Keith Billet: Read more: http://www.philly.com/philly/business /20100523_Firms_find_more_gas_beyond_the_Marcellus_field.html#ixzz0tvi1tDb9.
Is there anyone in Davidson Township still not leased; anyone working a lease; anyone who can offer any hands-on or heads-up details with obtaining what is good for the individual landowner, as well as are land?
Earlier today (7/19 ) I signed my mildred property for 5750.00 with Fred Taylor representing Chesapeake. 570-470-9016 I am not aware of any group effort in the area. as Ionly have a couple of acres I'm relatively happy with that price.
Saw several signs of DCNR leasing land to Gas company. Seizmic ribbons already in place. Heard they did lease some lands. Looking to see what company leased the State lands. Anyone have a site that I could find the leases for those leased in Sullivan. DCNR site has maps of leased areas but could not find the ones leased in Sullivan?
Great news for landowners near Connells Dam, Murraytown, Chinatown, Bernice and Mildred area. The members of the White Ash Land Assoc. voted August 8 to allow Chesapeake to extend a gathering line through their property. This should open up the area for a number of gas wells. I was told that construction should begin the the spring of 2011.
I was contacted this week by Geokinetics to do a seismic study on our 49 acres in Sullivan County that is leased to Chesapeake. They are offering $250 for permission to do so. Has anyone else been contacted by this company? I believe they are independent and not connected with Chesapeake.
I did contact Chesapeake when I received the letter from Geokinetics and asked if they were doing the testing for them and they confirmed that they were, she said if I felt comfortable signing the lease for 18 month of the testing period go ahead, and we did so..
I am just curious where is everyone's land located that is included in the Geokinetics study and jeff where is your land that they are already doing the seismic work?
The western half of my property on Cookhill Rd was seismicly surveyed this past Fall/Winter and the eastern half is to be surveyed now. Since you are west of me, I assume your area was already done, but if you were not contacted maybe you are too far south for this round of surveying.
Does anyone out here know if you can find out if they have done seismic testing on land in SullivanCounty Davidison Township in the past..I do not own the land anymore but I hold the mineral rights so I know that they would have had to contact the land owners. Is there a place I can look it up? Thanks for any help you can give.
Good question - Past seismic work in Davidson Twp was performed in the late 1970s by Geosource/PettyRay on Route 220 - it was 2D, using thumper trucks. Amoco was attempting to find structural traps throughout the Ridge and Valley and Allegheny Plateau Geological districts. Exxon and Texaco were acquiring leases in 1977 to drill a test well, but the bottom dropped out of the O&G market before a well could be drilled. In the mid 1980s, CNG/Texaco ran 2D seismic on the Muncy Creek Anticline in advance of drilling the 18,000' deep Leo Dieffenbach No. 1 test well on North Mountain. In the winter of 2008-2009, a 2D seismic line was run from New Albany to Dushore on Route 220, then Route 487 to Stillwater (south of Benton). Last summer, Tidelands Geophysical ran 3D seismic in northern Davidson Twp. Geokinetics is currently conducting a 3D survey throughout most of Davidson Twp. Geokinetics claims they are performing the work on behalf of several companies, including CHK and Chief (now Exco).
Hi! I talked to Exco who bought our lease from Chief and they said
Geokinetics does not represent them and if any damage is done to well or septic or home they are NOT responsible. In our lease it says the company leasing the land will do the testing and the person I spoke with said yes they will eventually do the testing and that the other company is trying to be the middle man and give us $5 an acre while they make a small fortune from Exco. If Exco does the testing they are liable for any damage that may occur. This way using Geokinetics they are not. We have not signed the agreement and do not plan on it until Exco is doing it or authorizing it.
Geokinetics is currently doing seismic work on my property and I haven't seen any problems. My parents and brother have also had them do work with no problems. Geokinetics is not a fly by night company so you don't have to worry.
They have been working in area counties for years and you don't hear of people complaining. Besides who knows if Exco will ever bother to do seismic work on one or two properties when all of your other neighbors are already done. $5 an acre is better then nothing.
Jeff
Apr 7, 2010
Jeff
Can you share anything about the new pipeline? I understand a presentation was going to be made to the County Commissioners about it.
Apr 8, 2010
john shorb
Apr 16, 2010
James C McDonald
Has anyone else received a document like this recently?
Jim
May 5, 2010
Keith Billet
May 5, 2010
James C McDonald
May 5, 2010
Jeff
May 5, 2010
Jeff
Certainly everyone has to make up their own mind. But unless someone is in a real money bind it is common sense not to sell them away. James McDonald said he was offered $4,800 per acre. The current return per month per acre is around $600 an acre with only one well in the unit. The first two years are the best so lets times that by 24 months and that is $14,400 per acre. Let's say that your unit has 6 wells then that is $86,400 per acre per month. If you are in it for the long haul then certainly the well rates drop perhaps as much as 70 percent so then it would be $180 per month per acre per well. That is if the price of gas does not go up. Also, if a person sells their rights someone else calls the shots on your property. It would be a greater long term gift for an older person to will their children or grand children the mineral rights.
May 17, 2010
Jeff
Sorry, I should have said $86,400 per acre after 24 months not per month.
May 17, 2010
James C McDonald
That, in a condensed version, is why we decided not to follow up on any mineral rights offers.
Jim
May 17, 2010
scott brion
You might want to check your source on the $600 per acre royalty figure. In a typical 600 acre unit with a 15% royalty and a $4 gas prices the well would have to produce around 20,000,000 MCF/day to pay out $600/acre. This is almost twice as high as the best PA well's announced monthly production and the amount would decline every month. By the 13th month the production would be less than half the first month and continue to decline although to a lesser degree every month. Average monthly royalties for the first year of a single unitized well are more likely less than $100/month range but this too depends on a lot of factors including royalty %, gas price, the particular well and unit size. I agree that in general and certainly with a lack of good information it does not makes sense for most people to sell their rights, but there are many situations where a party able to make an informed decisions may well consider it. $4,800 per acre may be a great price or a poor one depending on the property and owners circumstances. Full disclosure - I am actively buying mineral rights. I live and grew up in Lycoming county and believe it is important to provide owners good information to help them make a decision.
May 18, 2010
Mark Bielinski
When is someone going to start a landowners group for Sullivan? There still are almost 1000 landowners who haven't signed a lease yet...
May 18, 2010
Jeff
I based my $600 per acre figure on a friend's statement from a well in the Spring Lake area of Bradford County.
May 18, 2010
scott brion
No offense taken. My use of 15% was meant to be a conservative assumption in discussing a mineral sale. I assume the property was already leased and most existing leases (signed before 2008) are at 12.5% royalty and it looks like most will get drilled with no opportunity to get a higher royalty. You are absolutely right that a 20% lease is worth more than a 15% lease. I can't speak for others, but I definitely hope to make money buying mineral rights, why else would I do it? Any seller should be careful to learn as much as they can and to understand the potential value of the mineral rights before considering to sell them. It is particularly important to discuss your specific situation with someone knowledgeable who can help interpret all the variables and make comments on the your actual position. I am not involved in the transaction discussed below in anyway. The only reason I commented is to point out that in my experience the assumption & math presented did not seem correct.
May 18, 2010
john shorb
May 23, 2010
Keith Billet
http://www.philly.com/philly/business/20100523_Firms_find_more_gas_...
May 24, 2010
David
May 24, 2010
Jeff
The well will be located between Millview and Estella.
May 25, 2010
David
May 25, 2010
thomas kitchen
Jun 3, 2010
Jeff Ottaviano
Jul 8, 2010
john shorb
I attended the meeting. The first twenty minutes was a public relations primer concerning how wonderful Chief is. Chief had several knowledgable staff in attendance, in particular their water quality expert. They did a good job trying to answer everyone's questions, the bulk of which centered around safety and environmental concerns. I had three questions I wished to be answered, and they were. Chief is voluntarily casing all future gas well bore piping with oil well grade cement. Chief is agressively drilling in Sullivan County over the next year or two so as to drill as many wells as possible before their leases expire. They do not necessarily plan to bring the wells into production. Rather, they want to excercise their rights under existing leases and not have to pay a second time to release property. Many of the drilled wells will be capped, or moth balled, until such time as gathering lines catch up to the drilling. Third, potential drilling areas in which they hold leases containing pockets of land owners unreceptive to gas drilling and refusing to sign leases are the least likely (lower priority) potential drilling areas. Two other worthwhile pieces of infomation to be unveiled - they plan to hit the Sonestown and Muncy Valley areas hard. This area dovetails with a concentrated or mature area of effort for Chief in eastern Lycoming County. This area will see their gas transported south to the interstate pipeline in Lycoming County. They also have some plans for Fox, Forks and Elkland areas, but theses plans appear less aggressive than the aforementioned and the gas will flow north to the Tennessee pipeline in Bradford county. They also work freely and closely with Chesapeake, and develop together.
I thought the folks of Sullivan were very professional in their conduct and fair but firm in their questioning. Folks can be proud. Probably 75 or more folks attended. Several folks in the audience exhibited an anti gas bias, and interrupted eight to ten times to express personal opinions or hypothetical questions. The presentation group handled the situation well.
In summary, a fairly strong consensus was exhibited that the folks of Sullivan County take pride in their county's uniqueness and don't want it destroyed, even for money. On the heals of the BP fiasco, there was a healthy dose of scepticism with respect to Chief's assurances.
Jul 8, 2010
David
Jul 8, 2010
GMF
http://www.philly.com/philly/business /20100523_Firms_find_more_gas_beyond_the_Marcellus_field.html#ixzz0tvi1tDb9.
Is there anyone in Davidson Township still not leased; anyone working a lease; anyone who can offer any hands-on or heads-up details with obtaining what is good for the individual landowner, as well as are land?
Jul 16, 2010
Joe Googan
Jul 18, 2010
Richard Phillips
Jul 19, 2010
Richard Phillips
Jul 19, 2010
Joe Googan
20 %?
Jul 19, 2010
Richard Phillips
Jul 19, 2010
beth hamm
Aug 1, 2010
David
Aug 2, 2010
joe
Aug 2, 2010
Jeff
Aug 8, 2010
James C McDonald
Mar 27, 2011
Jeff
Mar 28, 2011
RRJ
We also signed up 2 to 3 weeks ago with Geo, But have not seen any work started yet..$5 per acre is also what ours was.
Mar 28, 2011
RRJ
James,
I did contact Chesapeake when I received the letter from Geokinetics and asked if they were doing the testing for them and they confirmed that they were, she said if I felt comfortable signing the lease for 18 month of the testing period go ahead, and we did so..
Mar 28, 2011
joe
Mar 28, 2011
Jeff
Mar 28, 2011
Joe Googan
Mar 28, 2011
RRJ
i am off of Wampole near 220 dushore
Mar 28, 2011
George Harer
Apr 8, 2011
Jeff Ottaviano
The western half of my property on Cookhill Rd was seismicly surveyed this past Fall/Winter and the eastern half is to be surveyed now. Since you are west of me, I assume your area was already done, but if you were not contacted maybe you are too far south for this round of surveying.
Apr 8, 2011
Penny J McCarl
Does anyone out here know if you can find out if they have done seismic testing on land in SullivanCounty Davidison Township in the past..I do not own the land anymore but I hold the mineral rights so I know that they would have had to contact the land owners. Is there a place I can look it up? Thanks for any help you can give.
Apr 9, 2011
G S Gass
Penny,
Good question - Past seismic work in Davidson Twp was performed in the late 1970s by Geosource/PettyRay on Route 220 - it was 2D, using thumper trucks. Amoco was attempting to find structural traps throughout the Ridge and Valley and Allegheny Plateau Geological districts. Exxon and Texaco were acquiring leases in 1977 to drill a test well, but the bottom dropped out of the O&G market before a well could be drilled. In the mid 1980s, CNG/Texaco ran 2D seismic on the Muncy Creek Anticline in advance of drilling the 18,000' deep Leo Dieffenbach No. 1 test well on North Mountain. In the winter of 2008-2009, a 2D seismic line was run from New Albany to Dushore on Route 220, then Route 487 to Stillwater (south of Benton). Last summer, Tidelands Geophysical ran 3D seismic in northern Davidson Twp. Geokinetics is currently conducting a 3D survey throughout most of Davidson Twp. Geokinetics claims they are performing the work on behalf of several companies, including CHK and Chief (now Exco).
Hope this info helps
GG
Apr 9, 2011
Thomas Cronauer
Hi! I talked to Exco who bought our lease from Chief and they said
Geokinetics does not represent them and if any damage is done to well or septic or home they are NOT responsible. In our lease it says the company leasing the land will do the testing and the person I spoke with said yes they will eventually do the testing and that the other company is trying to be the middle man and give us $5 an acre while they make a small fortune from Exco. If Exco does the testing they are liable for any damage that may occur. This way using Geokinetics they are not. We have not signed the agreement and do not plan on it until Exco is doing it or authorizing it.
Apr 23, 2011
Jeff
Happy Easter
Geokinetics is currently doing seismic work on my property and I haven't seen any problems. My parents and brother have also had them do work with no problems. Geokinetics is not a fly by night company so you don't have to worry.
They have been working in area counties for years and you don't hear of people complaining. Besides who knows if Exco will ever bother to do seismic work on one or two properties when all of your other neighbors are already done. $5 an acre is better then nothing.
Apr 24, 2011
Thomas Cronauer
Apr 24, 2011
Jeff
Apr 24, 2011
Thomas Cronauer
That's a good point!
Apr 24, 2011