Replies to This Discussion

Permalink Reply by hopeforoil on July 4, 2012 at 2:51am

Thank you hunter. Do you know what type of fee they are charging? Take the money, we have been talking with noble Marcellus.

Permalink Reply by hunter4440 on July 4, 2012 at 3:09am

I'm not sure of the fee, I have yet to sign anything. We are thinking the same as you, sell some and keep some. It it possible that we look back and regret it later, in the case of a real gusher or two. Than, on the other hand, there have been some real dogs drilled and walked away from. I for one do not believe that most wells will produce $5000 per acre, per year. A close friend of mine used to operate a fairly large oil and gas company before selling to Enervest. He crunched the numbers based on several factors, including the possibility of both oil and wet gas. For the best case scenario, based on last spring's prices, a mineral acre might produce $20,000.00 over it's lifetime. Of course, that is a whole lot more than $5000. 00 but the risk is now that of the buyer. I think a lot of other factors also play a part. If a person is nearing retirement age and the money is enough not to look back and regret it, then go for it. Or, you can leave for your children to live off of. NO!!!!

Permalink Reply by hopeforoil on July 4, 2012 at 3:42am

Hunter, I'm glad to see there are people that are thinking the same as us. Most people believe they are sitting on a gold mine. The reality is some are and some aren't. It's unrealistic to believe that every acre in this play will end up being productive. I've done some research on other shale plays and seems that even the best ones (eagle ford s Texas) have production numbers that vary greatly from well to well, even those in close proximity to one another. Yes we may leave some money on the table by selling a portion but I'm not one to look back. I'll take that money and make it work for me in my business. Btw happy 4th to all! We are very blessed to be Americans if we didn't live in this country we would not be having this conversation about our royalty "decision!"

Permalink Reply by Utica Shale on July 5, 2012 at 7:47am

Hunter4440,

 On June 27th, I posted my estimate for Royalties per acre over the lifetime of a well here LINK. My estimate was between $10,800 and $18,000 per acre.  That is just Royalties not including any Signing Bonus, which is extra.

Permalink Reply by Utica Shale on July 5, 2012 at 1:46am

Hunter4440,

 I did not say "$5,000 per year" , I said "$5,000 the FIRST year".

 Those are very different statements.

Permalink Reply by hunter4440 on July 5, 2012 at 7:27am

Got it... thanks

Permalink Reply by tacoma7583 on July 5, 2012 at 7:16am

Kinda looks like it is the Johnson & Johnson law firm in Canfield http://www.estateplanohio.com/attorney-profiles/.  Which I believe was DBA Cavalier,  acquiring leases in 2010-2011.  It looks like now they are buying mineral rights under http://wrpenergy.com/index.php

Permalink Reply by 0i7okn54zwbdo on July 5, 2012 at 7:39am

The WRP Energy website says nothing about buying minerals.

Permalink Reply by Utica Shale on October 16, 2012 at 4:24am

SALEM - A local landowner received a call a couple of weeks ago about selling the oil and gas royalties to his Salem Township property.

He had already leased the rights so he was a little surprised by the call.

But the caller, who identified himself as "land man" representing a Forth Worth, Texas-based company, realized he had not been heard correctly.

The caller said he was interested in the royalties and not the gas and oil rights.

The caller, who was doing most of the talking, made an offer for the royalties that the landowner called "tempting" but declined.

The landowner, who wished to be unnamed, said the caller knew about his property, but with public records in the Internet age, that's not unusual.

And the company has been persistent with subsequent calls offering to sweeten the deal.

"They've been around for awhile, I've heard that quite awhile ago," said Salem Township Trustee Chairman John Wilms.

"I've heard some stories," he said.

Trustee Bill Heston has heard about them too, noting they're similar to companies that buy up structured settlements.

He noted some companies are also trying to purchase mineral rights which he said, "could mean everything."

When oil and gas exploration companies lease the rights the deals almost always contain a royalty clause, usually a 15 to 20 percent cut on the product extracted from the well that is paid to the property owner.

The royalty is paid during the production life of the well.

Going after the royalties isn't a new game but it comes at a point when many observers agree that more drilling is needed to appreciate the enormity of the play while establishing the sweet spots regarding the quality and quantity of the products extracted.

It's clear there's a ton of oil and gas in the Marcellus and Utica shale plays and new wells show signs of high quality products, but for some it might too soon to exchange large lump sums of cash for long-term royalties.

But maybe not for others.

With the kind of money being spent, royalty deals aren't tied to reckless hopes but based on current production data and the most recent forward-looking commodity prices.

Like most, oil people are risk adverse and the deduction is they feel money can be made on the royalties, even before the first well-hole in Salem Township was drilled.

The Marcellus geology, as Consol Energy's General Manager Harry Schurr said a few weeks ago at the Utica Expo in Youngstown, will point the way.

"It's still a little ahead in development and optimization," he said.

That geology is good enough for someone to call from Fort Worth wanting to cut a deal with a Salem Township landowner.

And the shale boom rides on ...

 

Permalink Reply by hunter4440 on October 16, 2012 at 4:38am

Does someone care to offer the amount offered? Thanks

Permalink Reply by Kathleen on October 29, 2012 at 6:55am

Someone called me yesterday to say they were offered 5500 per mineral acre from the company out of Oklahoma. They are near the L&C well. Their letter came last week.

Permalink Reply by jonathan M. on October 29, 2012 at 12:30pm

Kathleen,

Do you know the name of the company?

Thanks

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