Auction results: 100 acres of mineral rights in southern part of county.

Already leased with Patriot  flipped to CHK.  Therefore no "bonus" on these rights,  just the royalties based on signed lease.   Appears to be a royalty of 1/8th ( 12.5%) NET so certainly far from the best deal written.  Of course it was negotiated in 2008.

It does give an idea of what the mineral rights add to property value.  This would be a "worse case scenario" for a royalty provision, what would the same rights be worth on 100 acres with a 20% no deductions clause?

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LISBON - Several parts of a lawsuit involving Chesapeake Exploration were dismissed last week, including parts of the lawsuit against a local man accused of notary fraud and slander.

Roger, Carolyn, James and Bruce Starkey of Mechanicstown in Carroll County filed a lawsuit against Patriot Energy Partners of Lisbon, PEP Leasing of Lisbon, Andrew and Thomas Blocksom of Lisbon, and Robert Dickey of Lisbon. The lawsuit alleges they are involved in some fashion with Patriot Energy and/or helping secure mineral rights leases from the Starkeys on behalf of Patriot Energy.

Also named as defendants are Buckeye Oil Producing Co. of Wooster, Bass Energy of Fairlawn, Wimsatt Family of Paris, Sonata Investment Co. of Columbus, and Chesapeake Exploration because all may have an interest in the leased property.

The lawsuit alleged the company engaged in questionable business practices to obtain the leases for only a fraction of what they were really worth and then sold the leases to other companies for significantly more money. The Starkeys also wanted more than $1 million in damages.

In the ruling by Judge Richard D. Reinbold Jr., visiting judge in Columbiana County Common Pleas Court, several parts of the lawsuit were dismissed. First, any claims of notary fraud or notary irregularities were dismissed, except for the rights of the plaintiffs to challenge whether Dickey properly notarized or had the right to notarize the plaintiff's leases. The ruling declares the plaintiffs may not argue any notary improprieties is in itself fraud.

Additionally, any assertion of slander was dismissed as well as any assertion Dickey committed fraud by not having a license. The claim of unjust enrichment was also dismissed. Finally, the question of quieting the title was dismissed.


The case will continue with a trial on Oct. 9 with several claims still to be determined including those dealing with fraudulent concealment and inducement, as well as civil conspiracy. Additionally the claim of a breech of contract by Chesapeake Exploration will continue.

 
I got an offer to buy my already leased mineral (20% gross) for 4200 an acre in the center of columbiana county from a co in OK.

Kathleen,

 So, this tells me the "investor" estimates that you can potentially receive $8,400 per acre (approx) in royalties over the lifetime of all wells on that property and they will pay you 50% cash upfront.

 

So in all honesty if your minerals put you in the higher tax bracket or you are already there, selling wouldn't be a bad thing. This way you don't have to wait out the well lifetime to give you that money. You could sell at the capital gain rate than invest. I'm not selling just seeing this from the side of someone who may wish to sell. I honestly didn't think it was a horrible offer.

Kathleen,

 

 Agreed, not a terrible offer. 

 

 But what if they drill only one well just before the 5 year Primary Term ends (HPB), then they wait another 7 years to put in the 2nd well, then they wait another 7 years to put in the 3rd well which then takes another 7 years to drain down. I realize that is extreme Worst-Case scenario but some landowners may be too old to wait another 26 years to collect all of their royalties.

 

Agreed. That's another reason why I see some people are wanting to sell.
Since this offer only came in Sat I'm wondering if others received something similar and if the amounts are the same. I hope people post.

Back in June, I was offered $4500.00 an acre, for all Oil and Gas rights. I'm going to ride it out, If the Wife and I Die, The Kid's or even Grand Kids will get the money. Heck these Wells could last Fifty years,Who knows. Why give it to someone else.

CD,

 In your case and most, I agree.

 But lets say, an older couple, with no children and no relatives, and significant debt might enjoy half of the money sooner than later (ie taking it to their graves). I know of alot of farmers that are "living on the edge".

 

  I wonder if a Nursing Home can divert the Royalty Payments to themselves, instead of the remaining spouse, if the Financial Planning is not done properly?

 

Nursing home can take a House. I'm sure they would Love an Oil and Gas Check!!!!!!!

If that person is on Medicare than yes they could divert the money. Than the poor spouse could make to much for their loved one to be on Medicare.
Private pay nursing home in Ohio 6 thousand a month.
Country driver, if there is a spouse the home does not need to be sold.
I was offered 3k several months ago but turned them down. I would strongly consider 4500. What company made that offer?

Jonathan,

 I just wonder ...

 What percentage of the acreage in the Ohio Utica Shale play will actually be drained of Oil & Gas. The ODNR Unit Acre drawings show the approx drainage area around the Horizontal Pipe. Will all of the 1.3 million acres leased by CHPK actually be drained of Gas & Oil or not?

 

 Some landowers may have 100% of their acres drained of O&G while other landowners may have very little.

 

 Does this "% of Land actually Drained" need to be taken into consideration when a landowner is determining a selling price?

 

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