Those 2 clauses below look terrible for a landowner. I'm no expert by any means, but those clauses look like they could tie up your land for a long time without much of a payment after the original bonus. Better hope they default on the 120 day payment window.
Jon, not only that, but the language regarding the bonus payment is really screwy too! Eclipse calls it an "ADVANCED DELAY RENTALS: To pay to the Lessor within 90 days of the Lease Date, as pre-paid delay rentals, the sum of $2600.00 per net mineral acre (the "Advanced Delay Rental Payment") Notwithstanding anything contained anywhere in this Lease or any public law to the contrary, The parties hereto stipulate and agree that this is a "Paid Up" Lease with no further delay rental or delay in marketing payments due to Lessor during the Primary Term hereof, and that any and all bonuses and delay rentals due or payable hereunder have been prepaid to Lessor for the purpose of keeping this Lease in effect during and for the entirety of the Primary Term. In accepting the bonuses and delay rentals, Lessor and Lessee stipulate and agree that it is deemed for all purposes that all delay rentals have been timely paid on the anniversary date of this Lease on any annual basis, regardless of when same shall have been actually tendered to Lessor.
Correct me if I'm wrong, but my interpretation of this is that they can tie up your land (no exploration, drilling...etc) for at least the length of the primary term.
A great short article regarding the value of NGLs (natural gas liquids) which helps in understanding the high value of the wet zone play in Ohios' Utica. Make sure any lease you sign covers all hydrocarbons (Ethane, Propane,etc.), or you could be very disapointed when you get that royalty check.
Here is a link to an article written by a prominent oil & gas attorney about lease clauses often found in leases offered in the Utica and Marcellus Shale plays. Interesting reading and reinforces the fact that you MUST have a good landowner-friendly lease that you FULLY understand.
I have been following this blog for several months with interest and appreciate the useful information that is being shared.
I did want to comment on posts from Dave Moore and Bob Caldwell on Aug 26 regarding Jeff Riggans and Amarado Oil. Jeff is a landman for Amarado, his son, Josh, is attending a local college. Josh was probably helping his dad with cold calls when he stopped by to see Dave Moore.
Jeff is one of the top landmen with Amarado Oil, a privately held development and production company based in Texas and with an office in Powell, OH. They have partnered with McGonagle Energy, a family-owned, Ohio based development company that began operations back in the 70's. Together they opened an office here in Cambridge last Spring and currently employ about a dozen people.
Amarado is experienced, well-funded and positioned to be a major player in the development of the Utica formation in Eastern Ohio. Their holdings in Texas are producing in excess of 20,000 Bopd. I have spoken with a number of landowners who have had dealings with them and the consensus is that they are offering competitive paid-up signing bonuses and higher royalties for individual landowners as well as groups of owners. Owners have received their checks the day they sign the lease.
Their standard lease is a bit brief but it is written to be amended to suit the specific needs and concerns of the landowner. I know of 3 attorneys (different firms) in Cambridge who are familiar with Amarado's lease and have prepared amendments for their clients; Keith Plummer, Dave Bennett and Dick Baker. Last I heard, none of them charge 4%.
With all of the leasing agents, specialty law firms, owner groups and international corporations who are being attracted to Eastern Ohio, Amarado offers the landowner the opportunity to work directly with a production company. In my opinion, it is an option that should be considered.
Big news this AM. Consol hasw entered into a JV that gives Hess Oil a 50% interest in Consols' Ohio Utica Shale Play. Hess is paying $6,000 per net acre for the wet zone counties of Harrison, Jefferson, Belmont, and Guernsey counties. There is an excellent map showing the wet zone and Consols' holdings on their website. Open the link below, go to the Investor Relations tab, then open presentations to analysts.
Guernsey Co is hot today. Another major player has emerged. Denver Col. based Petroleum Development Company (PDC) has secured approx 30,000 acres in Guernsey, Noble, Monroe,Morgan, and Washington counties. Most of it is HBP from older shallow well leases, but they state that they are looking for additional acreage in the wet zone of the Play.
Hey, Scott. Once the terms have been settled, land owner signs a letter of intent. Lease language gets finalized and Amarado does title search. Sign the lease, cash the check. If you don't have a copy of your property deed(s) you may want to visit the title department at the courthouse annex. Several friends and neighbors have had unpleasant surprises when they looked at their deeds.
John, yes I am aware of all that but most of the time there is a 90 day or so wait after signing while the o & g does the due diligence on your minerals.
Hi, Scott. Some companies are getting behind in their title searches but unless there is a problem with the deed, the due diligence does not need to take 90 days. A few days to a few weeks if the title search guys are really slammed.
Excerpt from an Order for Payment from one of the leasing companies in the area (not Amarado)
"Lessee shall then have ninety (90) business days from the effective date of Lease to review and approve title of said parcel(s) and additional adjacent parcel(s) not owned by Lessor(s) tendered as part of the “co-op” leasing process, and to tender payment of signing bonus as stated below. Should Lessor own more or less acreage as listed on Lease, Lessee may adjust payment accordingly without notice to Lessor(s). Lessor(s) understand that payment of the signing bonus is conditioned and contingent on 1) Lessee’s review and approval of title of parcels listed on Lease; 2) Lessee’s review of all or part of the “co-op” parcels submitted; and 3) final approval by Lessee’s management to tender payment. Lessee reserves the right to reject said Lease should title be unacceptable to Lessee, or for any other reason, including, but not limited to, insufficient funding for payment to be made to Lessor(s), and insufficient assignment interest in the parcel(s)."
I am not an attorney but those last couple of lines indicate to me that they will be using the 90 days to find a buyer for the lease they have signed with you so they can pay you.
They are taking 45 days to do full mineral searches. I called several title co's in Guernsey and they all said same thing. So the o & g may not take 90 but i bet it will be 60 if anything.
PITTSBURGH — Consol Energy Inc. says it's sold Utica Shale gas exploration and development rights in Ohio to Hess Corp. for $593 million.
The deal, announced Wednesday, will give Hess 50 percent of Consol's mineral rights to about 200,000 acres.
Consol, based in Canonsburg, Pa., said in a statement that Hess brings strong technical and operational expertise to the joint venture.
Hess will pay Consol $59 million when the deal closes in October and will invest another $534 million in the operation over the next five years.
As part of its investment, Hess will operate 80,000 acres in Jefferson, Harrison, Guernsey and Belmont counties, while Consol will operate the remaining areas including its acreage in Portage, Tuscarawas, Mahoning and Noble counties.
Exploratory drilling operations are expected to begin in the fourth quarter.
Saw this posted on the Belmont site this Am, posted by TonyMik. Hess is acquiring Marquette Exploration for their leases in the wet zone of the Utica. Hess has become a major player in one very busy week.
Things are awfully quiet in Guernsey Co. these days. Check out the Harrison Co. site for excitement. Just kidding. Here is a link to the Hess acquisitions and the value per acre that they valued our mineral rights. It's the second article down.
Mike you forgot to mention the most important thing.. Whats' the lease look like? You're timing is impeccable.. I'm waiting for next Tuesday with great expectations !
AT informed me that this article linked below refers to Ohio County in West Virginia. Although it refers to developemnts in the Valley and mentions the Exxon/Hess developements. Sorry 'bout that.
Anadarko Obtains Drilling Permits For Well In Utica Shale--Ohio Regulator
By Isabel Ordonez and Ryan Dezember, Of DOW JONES NEWSWIRES
Anadarko Petroleum Corp. (APC) has obtained permits to drill a well in the Utica Shale formation in eastern Ohio, according to the state's oil and gas regulator. The move makes the Houston company the latest energy firm to enter the latest big North American oil discovery.
Anadarko obtained this month permits to drill a horizontal well in Guernsey County targeting the Utica Shale, according to the Ohio Department of Natural Resources. Sparsely populated Guernsey County is located about 90 miles east of Columbus.
While Anadarko has been quieter about its activities in Ohio than some of its competitors, which include Hess Corp. (HES), Devon Energy Corp. (DVN) and Chesapeake Energy Corp. (CHK), the drilling permits show the Houston explorer has gained a foothold in the state. The size of Anadarko's position in the Utica Shale was not included in the information made public by the Ohio regulator.
Anadarko didn't immediately respond to a request for comment.
Last week Hess said it spent more than $1.34 billion acquiring 185,000 acres in Ohio. The New York company spent $593 million on a 50% interest in 200,000 acres held by Consol Energy Inc. (CNX) and spent another $750 million acquiring closely held Marquette Exploration LLC, which had 85,000 acres in the shale.
I am sure it has been posted on here numerous times, but if anyone happens to have the link for the ODNR site where you can monitor the new wells being permitted can you share the link again so that I don't have to fish back through all the pages to attempt to locate it. Thought I had it saved, but I guess I didn't...
I agree with you we need to know any production number that exist and any other information that anyone can supply as far as drilling progress. Leasing info is great, but many of us are leased and we need the other information as well. Thanks!
Woke up this morning to the sound of drilling just down the road here in Adams Twp. It appears to be an Artex well, in the college hill area on the S. Bloomfield quad. Beyond that i don't know much.
Private KeepOut
Aug 26, 2011
Philip Brutz
Aug 26, 2011
Philip Brutz
typo
17% net
Aug 26, 2011
Jon Henderson
Aug 26, 2011
Private KeepOut
Jon, not only that, but the language regarding the bonus payment is really screwy too! Eclipse calls it an "ADVANCED DELAY RENTALS: To pay to the Lessor within 90 days of the Lease Date, as pre-paid delay rentals, the sum of $2600.00 per net mineral acre (the "Advanced Delay Rental Payment") Notwithstanding anything contained anywhere in this Lease or any public law to the contrary, The parties hereto stipulate and agree that this is a "Paid Up" Lease with no further delay rental or delay in marketing payments due to Lessor during the Primary Term hereof, and that any and all bonuses and delay rentals due or payable hereunder have been prepaid to Lessor for the purpose of keeping this Lease in effect during and for the entirety of the Primary Term. In accepting the bonuses and delay rentals, Lessor and Lessee stipulate and agree that it is deemed for all purposes that all delay rentals have been timely paid on the anniversary date of this Lease on any annual basis, regardless of when same shall have been actually tendered to Lessor.
Correct me if I'm wrong, but my interpretation of this is that they can tie up your land (no exploration, drilling...etc) for at least the length of the primary term.
Aug 27, 2011
Philip Brutz
Aug 27, 2011
Shower Bath
A great short article regarding the value of NGLs (natural gas liquids) which helps in understanding the high value of the wet zone play in Ohios' Utica. Make sure any lease you sign covers all hydrocarbons (Ethane, Propane,etc.), or you could be very disapointed when you get that royalty check.
http://seekingalpha.com/article/290406-the-role-of-ngls-in-increase...
Randy
Aug 30, 2011
Finnbear
Here is a link to an article written by a prominent oil & gas attorney about lease clauses often found in leases offered in the Utica and Marcellus Shale plays. Interesting reading and reinforces the fact that you MUST have a good landowner-friendly lease that you FULLY understand.
Unusual Ohio Oil and Gas Lease ProvisionsSep 3, 2011
John kamm
I did want to comment on posts from Dave Moore and Bob Caldwell on Aug 26 regarding Jeff Riggans and Amarado Oil. Jeff is a landman for Amarado, his son, Josh, is attending a local college. Josh was probably helping his dad with cold calls when he stopped by to see Dave Moore.
Jeff is one of the top landmen with Amarado Oil, a privately held development and production company based in Texas and with an office in Powell, OH. They have partnered with McGonagle Energy, a family-owned, Ohio based development company that began operations back in the 70's. Together they opened an office here in Cambridge last Spring and currently employ about a dozen people.
Amarado is experienced, well-funded and positioned to be a major player in the development of the Utica formation in Eastern Ohio. Their holdings in Texas are producing in excess of 20,000 Bopd. I have spoken with a number of landowners who have had dealings with them and the consensus is that they are offering competitive paid-up signing bonuses and higher royalties for individual landowners as well as groups of owners. Owners have received their checks the day they sign the lease.
Their standard lease is a bit brief but it is written to be amended to suit the specific needs and concerns of the landowner. I know of 3 attorneys (different firms) in Cambridge who are familiar with Amarado's lease and have prepared amendments for their clients; Keith Plummer, Dave Bennett and Dick Baker. Last I heard, none of them charge 4%.
With all of the leasing agents, specialty law firms, owner groups and international corporations who are being attracted to Eastern Ohio, Amarado offers the landowner the opportunity to work directly with a production company. In my opinion, it is an option that should be considered.
Sep 7, 2011
scott peterson
Sep 7, 2011
Shower Bath
Big news this AM. Consol hasw entered into a JV that gives Hess Oil a 50% interest in Consols' Ohio Utica Shale Play. Hess is paying $6,000 per net acre for the wet zone counties of Harrison, Jefferson, Belmont, and Guernsey counties. There is an excellent map showing the wet zone and Consols' holdings on their website. Open the link below, go to the Investor Relations tab, then open presentations to analysts.
http://consolenergy.com/default.aspx
Randy
Sep 7, 2011
Shower Bath
Guernsey Co is hot today. Another major player has emerged. Denver Col. based Petroleum Development Company (PDC) has secured approx 30,000 acres in Guernsey, Noble, Monroe,Morgan, and Washington counties. Most of it is HBP from older shallow well leases, but they state that they are looking for additional acreage in the wet zone of the Play.
http://www.msnbc.com/id/44423112
Randy
Sep 7, 2011
Shower Bath
Let's try this link instead,
http://www.msnbc.msn.com/id/44423112
Randy
Sep 7, 2011
william r rinehart
Does anyone have a contact name and number to the link below?
Bill
Sep 7, 2011
John kamm
Sep 7, 2011
scott peterson
Sep 7, 2011
John kamm
Hi, Scott. Some companies are getting behind in their title searches but unless there is a problem with the deed, the due diligence does not need to take 90 days. A few days to a few weeks if the title search guys are really slammed.
Excerpt from an Order for Payment from one of the leasing companies in the area (not Amarado)
"Lessee shall then have ninety (90) business days from the effective date of Lease to review and approve title of said parcel(s) and additional adjacent parcel(s) not owned by Lessor(s) tendered as part of the “co-op” leasing process, and to tender payment of signing bonus as stated below. Should Lessor own more or less acreage as listed on Lease, Lessee may adjust payment accordingly without notice to Lessor(s). Lessor(s) understand that payment of the signing bonus is conditioned and contingent on 1) Lessee’s review and approval of title of parcels listed on Lease; 2) Lessee’s review of all or part of the “co-op” parcels submitted; and 3) final approval by Lessee’s management to tender payment. Lessee reserves the right to reject said Lease should title be unacceptable to Lessee, or for any other reason, including, but not limited to, insufficient funding for payment to be made to Lessor(s), and insufficient assignment interest in the parcel(s)."
I am not an attorney but those last couple of lines indicate to me that they will be using the 90 days to find a buyer for the lease they have signed with you so they can pay you.
Sep 7, 2011
scott peterson
Sep 7, 2011
Hoodwinked2
Consol Energy in $593 million deal with Hess Co.
Save ↓ More
Associated Press
PITTSBURGH — Consol Energy Inc. says it's sold Utica Shale gas exploration and development rights in Ohio to Hess Corp. for $593 million.
The deal, announced Wednesday, will give Hess 50 percent of Consol's mineral rights to about 200,000 acres.
Consol, based in Canonsburg, Pa., said in a statement that Hess brings strong technical and operational expertise to the joint venture.
Hess will pay Consol $59 million when the deal closes in October and will invest another $534 million in the operation over the next five years.
As part of its investment, Hess will operate 80,000 acres in Jefferson, Harrison, Guernsey and Belmont counties, while Consol will operate the remaining areas including its acreage in Portage, Tuscarawas, Mahoning and Noble counties.
Exploratory drilling operations are expected to begin in the fourth quarter.
—Copyright 2011 Associated PressSep 7, 2011
Finnbear
Fracking on hold Waiting for results of studies on impact of drilli...
I wonder how this will affect leasing activity in Ohio?
Sep 8, 2011
scott peterson
Sep 8, 2011
Philip Brutz
Sep 8, 2011
Shower Bath
Saw this posted on the Belmont site this Am, posted by TonyMik. Hess is acquiring Marquette Exploration for their leases in the wet zone of the Utica. Hess has become a major player in one very busy week.
http://phx.corporate-ir.net/phoenix.zhtml?c=101801&p=irol-newsA...=
Randy
Sep 8, 2011
Shower Bath
An excellent summary article of Ohio's Utica Play and the major O&G companies involved:
http://seekingalpha.com/article/292408-utica-shale-oil-play-update
Randy
Sep 8, 2011
Shower Bath
Things are awfully quiet in Guernsey Co. these days. Check out the Harrison Co. site for excitement. Just kidding. Here is a link to the Hess acquisitions and the value per acre that they valued our mineral rights. It's the second article down.
http://www.mineralweb.com/news/
Randy
Sep 15, 2011
Steven Gardner
Sep 16, 2011
scott peterson
Sep 16, 2011
Steven Gardner
Sep 16, 2011
Shower Bath
Guernsey in the news. Anyone out there leased with Anadarko? How were they to work with, lease rates, etc?
http://www.foxbusiness.com/markets/2011/09/16/anadarko-obtains-dril...
Randy
Sep 16, 2011
Shower Bath
Something for all of you KWGD guys to ponder. Keep in mind that the royalty of 19% is more of a net than gross.
http://www.theintelligencer.net/page/content.detail/id/559449/Prope...
Randy
Sep 17, 2011
Shower Bath
Belmont County is getting hot, with another major taking a position. This has to be just their first acquisition.
http://www.news-register.net/page/content.detail/id/559610/Chevron-...
Randy
Sep 20, 2011
Shower Bath
AT informed me that this article linked below refers to Ohio County in West Virginia. Although it refers to developemnts in the Valley and mentions the Exxon/Hess developements. Sorry 'bout that.
Randy
Sep 20, 2011
mark a. seng
Sep 20, 2011
scott peterson
Sep 20, 2011
scott peterson
Sep 21, 2011
Red Skelton
Sep 21, 2011
paul geiger
Anadarko Obtains Drilling Permits For Well In Utica Shale--Ohio Regulator
By Isabel Ordonez and Ryan Dezember, Of DOW JONES NEWSWIRES
Anadarko Petroleum Corp. (APC) has obtained permits to drill a well in the Utica Shale formation in eastern Ohio, according to the state's oil and gas regulator. The move makes the Houston company the latest energy firm to enter the latest big North American oil discovery.
Anadarko obtained this month permits to drill a horizontal well in Guernsey County targeting the Utica Shale, according to the Ohio Department of Natural Resources. Sparsely populated Guernsey County is located about 90 miles east of Columbus.
While Anadarko has been quieter about its activities in Ohio than some of its competitors, which include Hess Corp. (HES), Devon Energy Corp. (DVN) and Chesapeake Energy Corp. (CHK), the drilling permits show the Houston explorer has gained a foothold in the state. The size of Anadarko's position in the Utica Shale was not included in the information made public by the Ohio regulator.
Anadarko didn't immediately respond to a request for comment.
Last week Hess said it spent more than $1.34 billion acquiring 185,000 acres in Ohio. The New York company spent $593 million on a 50% interest in 200,000 acres held by Consol Energy Inc. (CNX) and spent another $750 million acquiring closely held Marquette Exploration LLC, which had 85,000 acres in the shale.
Read more: http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=20110916...
Sep 21, 2011
Nelson Roe
I am sure it has been posted on here numerous times, but if anyone happens to have the link for the ODNR site where you can monitor the new wells being permitted can you share the link again so that I don't have to fish back through all the pages to attempt to locate it. Thought I had it saved, but I guess I didn't...
Thanks,
Nelson
Sep 21, 2011
Red Skelton
Sep 21, 2011
Red Skelton
Sep 21, 2011
Nelson Roe
Sep 21, 2011
DM
Sep 21, 2011
Shower Bath
Something interesting to read on the value of shale play O&G companies and their leased acreage.
http://seekingalpha.com/article/294710-mark-papa-on-eog-s-eagle-for...
Rand
Sep 21, 2011
Steven Gardner
They don't have far to haul gravel on that one!
Did anybody notice that the permit on this one says 10,600 feet
to the Utica?
Sep 21, 2011
Red Skelton
Sep 21, 2011
Shower Bath
Industry leaders discuss the value of the Utica Play in Columbus yesterday.
http://finance.yahoo.com/news/McClendon-Values-Utica-Shale-bw-32388...
Randy
Sep 22, 2011
John kamm
http://www.oogeep.org/media/pressreleases.html
Sep 23, 2011
Red Skelton
Sep 23, 2011
Robert Bond
Mike,
I agree with you we need to know any production number that exist and any other information that anyone can supply as far as drilling progress. Leasing info is great, but many of us are leased and we need the other information as well. Thanks!
Sep 23, 2011
Jon Henderson
Sep 25, 2011