Replies to This Discussion

Permalink Reply by Tony Rox on June 29, 2012 at 12:45am

Agreed in some respects.
WE have what THEY need....

Historically, the operators came in and acquired what they needed at an insulting and what should be an illegal price.

The elevated levels of communication via forums such as this have educated the average landowner.

You have presented very strong and valid points my friend. And, I certainly respect you point of view. Your words and plans are valid and contain a great plan on paper.

A lesson that I had learned many years ago was that you can map out a plan of defense or attack. But, if you are not fluid or prepare for contigencies, as in (dramatic comparison - I know) D-Day Invasion. If something does not bend, it breaks.

Also, most of the landowners in places like Eastern Ohio are not in a position to wait.

I guess that there are pros and cons to both sides. But, we are indeed fortunate to have this kind of 'problem'.

Fun and fair exchange. Thank You.

 

 

Permalink Reply by Jim Litwinowicz on June 29, 2012 at 2:15am

Yes, a good discussion.
Fluidity is important. When we first started, Marcellus was the play and we are on the edge of it so we set a price target of $1500/acre. Company A wouldn't go above $750.  As time went by we learned about the Utica and raised our target.  Company finally offered $1500 but we had raised our target to $3000....which we eventually got. Company A could have had it had they offered $1500 a year earlier....sure glad they didn't.

Every county and even every township is different. Timing is also critical. Best to deal when there are several players showing interest and bidding up the price.  Sign too soon and get less.  Sign to late after the competition wanes and also get less.

But once you are in the $3000 range you are taking a gamble with serious stakes. Waiting too long can cost you a lot of money at that point.

Everyone should be happy with what they got as long as it was reasonable. If your neighbor gets a little more, be happy for him instead of jealous. Not everyone will sign at the peak.

We are blessed, lets all enjoy it.

Permalink Reply by Jim Litwinowicz on December 1, 2011 at 6:06am

Richard; I'm replying to your comment here because I do not want to dominate the general forum with a back and forth.

I am not a landman as I do not represent gas companies but represent landowners to get them a better lease.

Landowners join groups precisely because they look at the bigger picture.  They know that being in a group gives them better negotiating power when dealing with large corporations. The track record of groups across the state has been one of great success. They consistently get better bonus payments, higher royalties, and lease addendum that protect their rights and the land. Its been debated here at this site at great length.

While you may give up some rights as a group member, what you gain may greatly outweigh what one gives up.  Only each landowner can decide what is best for them.

You can do as you wish.  You can negotiate as one on one or join a group. Its your choice and is absolutely fine with me whatever you choose. What I don't understand is the need to criticize what others do. Every person has their own situation and only they can decide what works best for them.

 

Permalink Reply by Jim Litwinowicz on December 1, 2011 at 8:00am

R East; "Map it, show it, sell it."

 

If you think thats all that is involved, than I wish you luck.

Permalink Reply by Sam Douglass on December 5, 2011 at 4:18pm

Large or small probably has little to do with a landowner's right to make her or his own deal. 

What you have to sign when you join the group does matter.  Some group contracts or contracts offered by agents and flippers can limit flexibility if the language says so or if you are bound to pay a commission to some one.  You may or may not be committed to the groups deal depending on the contract at the outset.

Anyone working for the group who agrees to wait for payment 'till money comes in the door as the deal is finalized will want landowners to signsomething to protect that fee up front.

A loose organization can give the benifit of group barganing power and leave the landowner free to make that deal or not using [or not using] a lawyer in the final stages to see if the deal can be adjusted to specific needs.  Read any contract you are asked to sign.  Understandably, some may have pressing financial demands that require departure from the group effort - making an individual deal before the group deal is made.  That weakens the group by some measure but is unavoidable.

Even after the group deal, most producers are willing to talk about special problems an individual landowner might have before finalizing - such as possibly agreeing to where a well pad will not be located if there are alternatives, special requirements for crops and timber etc.  and possibly financial compensation for having the well pad on the property.  However, negotiating overall better bonus and royalty than the group seems unlikely - Unless one wants to wait out the poker game till the time drilling is about to be done and gamble all or nothing.

Of course, if you depart too far from what the group negotiates the producer may change some of its good terms. 

Permalink Reply by Sam Douglass on December 13, 2011 at 3:11pm

It depends on the group and the contract you make.  As I understand it the NW Pa group, at least at the moment, does not bind anyone to anything except a little front end money to make it work.  After the group is done you could still negotiate for a better deal, but you are not likely to improve the financial terms without the group strength - unless your property is right in front of the drill.  But there are other things besides the money that may induce a landowner to take it a little further and the company may be receptive to those things.  Or you do not have to make any deal if you do not like what is offered.

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