Replies to This Discussion

Permalink Reply by 09bp5t05myjl3 on February 14, 2012 at 6:26am

How are things shaping up down there Frank? Think the Anterro deal will spark things in the county?

 

Permalink Reply by frank ellis on February 14, 2012 at 2:25pm

Tom,
Things are good. Jennifer and the team have talked to a lot of companies. We know these things take time and we all have to remain patient. I will say that the 5900/21 deal made my eyeballs pop and to your question of spark, I think so. If you remember Exxon/XTO was the first in the area. You have to ask yourself, why were they here? Out of all the places in this shale play and they chose little ole Monroe county! The naysayers say, oh it's dry gas its not worth as much as the other counties. Guess what? The highest price to date to my knowledge is in our county, where everyone but EXXON stayed away from. Exxon the biggest elephant in the world came here and wanted all the acres they could get east of 800. Why? Because they know something that everyone else doesn't. We have two plays down on the riverfront and we know the Marcellus is wet and it's thicker on this side of the river than in WV. Now if Exxon's here they must think there's two wet shale plays. Or do they know there is? That's the question we all want answered and will have to wait until more data comes out. Sorry for going on and on but that deal yes put a little spark in me and I'm happy for everyone involved. All those involved deserved the big pay day.

Permalink Reply by psychosid on February 15, 2012 at 7:02am

Where did you find information that said the Marcellus is thicker on the Ohio side of the river?  All the maps I've seen have it getting thinner as it moves west and south out of Belmont County.  The Utica should be fine.  Also, there are some grumblings that the 21% wasn't a true Gross Royalty because the Lease had a 'Market Enhancement Clause' that threw the enhancement cost back at the Lessor, or at least 21% of the enhancement cost.  And, if you look at the townships that were included in the Antero deal, they are all on the Western side of the county and basically formed units with southwest Belmont and eastern Guernsey.  There is still a great deal of speculation about whether or not the Utica in Eastern Belmont County is 'Wet'.  They won't know until wells are drilled and producing.  The speculation is that the Utica is mainly 'Dry' gas in the Eastern-most townships in Belmont County, so I don't see how Eastern Monroe County would be any different.  Ask the Riverfront Landowners Group Experts this question and post it on this thread if you have time.

Permalink Reply by frank ellis on February 15, 2012 at 8:46am

Sid,
Check out these maps. They are pretty good sources. The first one shows that the Marcellus is thicker in our area. I found this information after a land man from Magnum Hunter wanted to lease my property for 300.00 an acre last spring. He said they wanted land in and around the Sardis area because the Marcellus was thicker than on the WV side. The second link is to a Magnum Hunter presentation 2012, slide 31 shows their map of the wet gas line in the Marcellus. There was a well drilled up on Long Ridge above Hannibal Ohio that "they say" hit big and the plans are to drill several more additional holes than was originally planned. I hope this helps. How's things in your area? Jennifer Garrison and her team just announced another deal they rapped up in northern Noble. I'll see what I can find out about the 21%.

http://www.marcellus.psu.edu/images/Marcellus_thickness.gif

http://www.google.com/url?sa=t&rct=j&q=magnum%20hunter%2020...

Permalink Reply by psychosid on February 15, 2012 at 11:11am

Do you know what Garrison's group fee will be?  The Lensman Group was 4% of the Bonus and the KWGD group was charging 5% of the Bonus.  I thought they were both high considering my lawyer has had 3 group signings (none wanting my Township) and his fee was 0.5% of the Bonus.  His lease had around 45 addenda added to the gas company's lease. 

Is the well your referring to the Lee Wilson Rig #25, Eisenbarth Pad on Keidash Point?  They had some issues initially with a slip on the back side of the pad.  They were drilling the last time I went by the site.  I haven't heard any productions from the wells up off of SR536.  I believe they have to publish productions with the ODNR Division of Mineral Resources.

Our area is really quiet and has been since the end of November.  I really feel it's slowed down because the O&G companies and joint ventures are going to start producing from the acreage they have already secured, filling in additional leases as the unit requires.   

The psu map shows southern New York looking promising.  If NY lifts the moratorium on drilling, it seems like the O&G companies will move to acquire leases in that area.  Although, the Utica plays seems to have changed the direction of the leasing.  With NG being around $2/mcf, the entire play seems to be shifting to the Wet and Oil zones of the Utica in Ohio.  I look for a lot of wells to be drilled in Ohio starting this year. 

Permalink Reply by frank ellis on February 16, 2012 at 5:13am

Sid,
Jennifer Garrison and her team get 2.25 percent of our signing bonus. It's a one time fee. I will say this about the work they have done. They've earned it. The lawyers from Bricker and Eckler have spent countless hours helping many of our members to clear old leases up and in some cases have help people get old wells abandoned. The Beck/XTO and ILG things were fiascos but they gave legal advice and helped many through those issues. I haven't heard of too many groups that are helping their members out like that. I know I open myself up for ridicule with a statement like that but believe me they have been a pleasure to work with. By the way and for the record, I am not getting anything other than the same lease that everyone else gets. We have stuck together and have helped each other out and all the headaches will be worth it in the end.
The answer to your question about the Long Ridge well is yes.
The 21 percent that we talked about does have enhancement costs associated with it.
Here's another link to a map that's out there.
http://www.post-gazette.com/pg/12027/1206355-503.stm?cmpid=marcellu...
Have a good one Sid and I hope the activity starts up again in your neck of the oil fields soon.

Permalink Reply by frank ellis on February 18, 2012 at 2:28am

Gale,
I'm not avoiding you, I just don't know those answers. I do know that there are provisions that protect the landowner from the producer selling it to a subsidiary that will in turn sell the finished product to yet another subsidiary. We want protections from getting flim-flamed on prices coming and going to different facilities owned by the same company.
I haven't seen the Noble County lease but will try to answer your question soon.
This is an exciting time in our area but we all need to be vigilant and doing our due diligence to protect our land/mineral values. The best way we can do this is to get in and stay in a good land group that is run by professionals not brokers. Professionals work for the landowners, brokers, although they may be attorneys, don't always have the landowners best interest at heart. Let me be clear, I'm not accusing anyone of anything. I'm just saying be careful who you harness your cart up to. There are no do overs in this process so if we only get one shot then we all need to be on our guard.

Permalink Reply by frank ellis on February 18, 2012 at 4:42am

Gale,
I'm not going to get into a broker vs professional tit for tat that should be self explanatory.
I will try and get information on the Noble lease for you.

Permalink Reply by psychosid on February 25, 2012 at 2:14pm

So the total fee isn't 4.5% of the bonus as originally reported on this forum?

Permalink Reply by frank ellis on February 18, 2012 at 6:53am

Gale,
The market enhancement deductions are fairly standard in leases that cover the liquid hydrocarbons/wet gas. The operation of these provisions will depend on the specific facts and circumstances for each landowner and their oil company lessee. The Southeastern Ohio Landowner Association lease in Noble County contained a market enhancement provision in the royalty provision with certain constraints on the costs and expenses that could be deducted.
If you need more information on this you need to join a group or start your own group and hire attorneys that have answers and will protect you and your group.
Whatever you do, don't try and negotiate this once in a lifetime deal by yourself. They will eat you alive.

Permalink Reply by 09bp5t05myjl3 on February 21, 2012 at 4:37am

Wow some huge variences in prices here in same approximate areas? why is that? How could the same Group accept $1000 less than they got 3 months earlier when prices seem to be increaseing & $1900 less than anther group in same Twps in less than a week? does that set the process back?

Permalink Reply by Angela Smith on February 21, 2012 at 10:12am

The difference is in the terms of the lease.  The Eclipse deal had several provisions that were very advantageous to the landowners. 

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