My farm is located in SE allegheny county, Elizabeth Twp. The original offer from them was 250 per and that was about three months ago. They are negotiable on the royality, they started at 12.5% Just today they offered 500 per and will still negitiate the royality rate. We must sign by 8-14 and that will not happen as they want me to discuss same with all the neighbors. I am under the impression they only want to do Hydraulic and I/we would want a deep verticle also. Any thoughts are appreciated as I am not going to rush into anything, it is just thier sales tactic. Thanks, Scott

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Comment by scott m on August 8, 2009 at 10:02pm
Thanks Joe for your comment. They did back off thier date since there will be multiple people involved, as I thought they would. They have also said that they could up the offer since there many acres involved.All stay tuned and thanks, Scott
Comment by terry hazlett on August 8, 2009 at 10:34am
Joe Mcferron, how do you figure its free money ? we landowners pay alot of money in taxes for this so called free money you talk about. its our gas and i understand it takes gas co resources to get it out ,but free money come on now thats just ridiculous.and i would'nt call it a sales tactic, more like a scare tactic! sign by this date or else , yea definitely a scare tactic. but as people get educated i think its working less & less for the og co. it just cracks me up every time i hear a landman say its free money! good luck with that one!
Comment by scott m on August 7, 2009 at 8:45am
We will have an attorney and will not be pressured by time. Thanks Jim and Carolyn for your insight. Scott
Comment by James H. Bass on August 7, 2009 at 8:34am
While the advice you are recieving is absolutly correct and well meaning, I highly recommend that you retain a Oil and Gas Attorney to help negotiate your lease. I am a mineral owner and I am Oil and Gas Professional who has leased over 600,000 acres in West Virginia. Frankly, we would prefer to have an attorney involved they actually cut down the negotiating time. Check around they are easy to find. Good luck!
Comment by Carolyn Knapp on August 7, 2009 at 7:54am
Scott:

Make sure that you get additional addendums on your lease to protect your interests. First make sure it is only for drilling and not storage or injection wells. What is the term of the lease they want? There are many other important addendums. For instance, make sure you have a pugh clause. Do not be pressured by them you need to make sure that the lease is one that you can live with.
Carolyn
Comment by scott m on August 7, 2009 at 7:02am
Thanks Brian for your insight. You are right about various locations and what is offered. I will post again as I/We move forward. Scott
Comment by Brian Day on August 6, 2009 at 9:23pm
I scanned all of these entries really fast and may have missed a comment. Did anyone mention to make certain that the royalties are paid off of the well head? If royalties, no matter how high, come off of the net, you can be charged for a hell of a lot of the expenses of the well. Also, I am not sure that you can truly compare lease fees and royalties apples to apples in various localities throughout the Marcellus region. Some areas are going to hold more gas, in areas easier to drill and frac, and closer to pipelines able to handle the flow. I do like that landowners seem to be educated or stiving to get educated on all of the complex issues of leasing. i read through a blog the other night on this site where a land man was involved. He was saying take whatever is offered and like it - that is the best you are going to get. Te discussion was getting very heated. In Tioga County where I own land, these land men came in a year or so ago and really tried to play everyone for a stouge, like we all played banjo in Deliverence. Most people didn't have a lot of money there, but they generally valued education as they grew up and most of them had intention of working every day of most of their life to earn their keep. They paid taxes and bought gasoline. Most of them caught on to the land mens' song and dance pretty quick. Some leased too cheap, but leases run out -sometimes before holes get punched. Hopefully drilling companies will stop counting a person's teeth as a measurement of thier IQ.
Comment by scott m on August 6, 2009 at 8:24pm
Thanks to all Scott
Comment by Paul Karl Steffens on August 6, 2009 at 7:12pm
Scott, the offer from Chesapeak seems very low. A group from Binghampton, NY was offered 3,500 from Hess.
Comment by Kurt Anderson on August 6, 2009 at 4:52pm
12.5 is standard, the lease fee is up to you. Also get something for damages. If you are looking for mailbox money (royalty) I would cut them a sweet deal but with a short fuse so they have to drill on you quickly. Time value of your money.

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