Replies to This Discussion

Permalink Reply by Billy Park Whyde on January 16, 2012 at 5:58am

  The Utica play is after the wet gas and oil which is predominate in eastern Ohio, the new frontier you might call it. With NG prices being low I have to believe Pa will be on hold till  NG prices increase.

  Property is worth what some one will pay for it !  Are you willing to sell it lock stock and barrel then it has a possibility of a high value. If your wanting to retain mineral rights it might hurt the value considerably, will you keep timber rights another consideration.

   If I were selling I would ask for what the property is really worth as far as property (house, buildings, tillable acreage, location, schools, road frontage ect.  Now here come the tricky part. Of you know you could lease the land for say $3000/acre = $267,000 so a new owner could grab that the next day after selling. Well your not going to give that away are you, I doubt it.   But at that point you have speculation for a buyer. You also have a royalty value to consider as speculative.

  I think the only way I would sell for value is to have a prospective buyer agree to be under a lease proposal that would allow a lease to take place with you receiving the initial lease money with the new buyer making an assignment of the lease payment to you with a agreed over riding royalty percentage being assigned to you.

  It could be done with the buyer getting the mineral rights granting the lease under his viewed desires in a lease while taking into consideration royalties but limiting speculation to a degree.

  In this manner the buyer would have a say on the property he is about to buy.

   An attorney could more than likely make this happen but in more likely hood the buyer would not need financing.  A lot of possibilities.

  This is a whole new ball game  with a crystal ball to bright to look into.

• ▶ Reply

Permalink Reply by Mike Filer on January 16, 2012 at 6:21am

Thank you, I need the crystal ball. My thoughts have been a bird in the hand and let it all go.

Mike

• ▶ Reply

Permalink Reply by Billy Park Whyde on January 16, 2012 at 6:35am

 Another option if your able to retire look for a warm climate, just lease the property rent the property out through a management company ( Amish like these deals) you retain all the property,  harvest a timber crop in the future, get a monthly rent, possible royalty  along with $267,000 and a good tax accountant I think you can kick your shoes off and relax.

• ▶ Reply

Permalink Reply by Billy Park Whyde on January 16, 2012 at 6:38am

I forgot Mike put me in your will, lol! 

• ▶ Reply

Permalink Reply by Mike h on January 16, 2012 at 7:31am

You also have to consider what impact a lease with bad conditions might have on what a potential buyer might be willing to pay. I'm dealing with that now. A neighbor died and his land would make a nice addition to our farm. Unfortunately he signed an insanely crappy lease (just as an example - "lessee has the right to use any and all water except for household water"). We will speak with his heirs but I have a feeling that we will not be able to come to an agreement. Because there is a contguous lands clause in the lease we would need to do the purchase through a seperate LLC which has a negative impact on getting the property into CAUV (will have to wait 3 years instead of putting it in right away).

Just a few thoughts.

• ▶ Reply

Permalink Reply by Mike Filer on January 16, 2012 at 10:43am

Mike, I have considered the impact of a new lease for a new owner and that's why I did not release with PGE.

• ▶ Reply