Replies to This Discussion

Permalink Reply by Kathleen on March 16, 2013 at 9:58am

Hi,

I know someone very reliable that works in a brokerage house and told me people are bringing in royalty checks from the columbiana county producing wells.
She said most are a thousand per acre.
She's not overly interested in this industry so I could not get a break down of how that was figured. I'm hoping to see if she can see the whole check page that will show the full break down. Maybe someone will bring that in too one day.

Permalink Reply by Roger Pyle on March 16, 2013 at 10:19am

Was she referring to royalty checks (which would be calculated according to production) or signing bonus (which would be calculated by the acre)?

Permalink Reply by Kathleen on March 16, 2013 at 10:27am

Royalty checks. The amounts broke down to a thousand an acre.

Permalink Reply by Roger Pyle on March 16, 2013 at 10:35am

Aren't all royalty checks based on production?

Permalink Reply by Kathleen on March 16, 2013 at 10:45am

She only seen the checks, not the production part of the paper work. They knew how many acres where in the unit and how big the checks where.
When I got my 53 dollars every 3 months or so on 37 acres off a Clinton well years ago, I remember the check was separate from the production breakdown.
I would love to see a production breakdown on one of these checks.

Permalink Reply by Kathleen on March 16, 2013 at 12:48pm

Her exact words were "people are coming in with checks from the two producing wells in columbiana county"
Again she doesn't follow this so I'm guessing she was told that by someone there.

Permalink Reply by Roger Pyle on March 16, 2013 at 1:07pm

So what does the acreage have to do with it?

Permalink Reply by Kathleen on March 16, 2013 at 1:15pm

Ex: 36 acres in the unit, check received approx. 36 thousand dollar check.

Permalink Reply by Robin Hood on March 16, 2013 at 3:35pm

The state of Ohio requires the production numbers for 2012 are  to be posted by the end of March, so we should be getting some confirmation of these numbers shortly. 

Chesapeake, has been very discreet as to results in Columbiana County and due to the lack of pipelines this production information will continue to lag, I fear.

Permalink Reply by Tim Tarr on March 17, 2013 at 3:43am

Keep in mind if these are the first royality cheeks. They would be for several months of production and not just 1 month.

Permalink Reply by Utica Shale on March 18, 2013 at 4:49pm

Jay,

 There are wells that "could" generate $1,000/month/acre Royalties and there are some wells far below that, too.

 You make many assumptions by computing First Year Production of a Utica Well from just the Initial Production figures combined with the Macellus Decline Curve. It might be true and it might not.

 

 Also, you used 21% Gross Royalties while many people have old leases at 12.5% Net. That alone will cut royalty estimates in half.

 

 We have the actual data from 206 days of real Production from the Mangun Utica Well in Carroll County, Ohio and it is no where near $1,000/acre/month.

 

 Do think these Initial Production Rates ...

 1) 6 Million Cubic Feet of Gas per day

 2)  650 bbl's of NGL's per day

 3) 1,500 bbl's of Oil per day

 is going to be typical or average ?

 

 

Permalink Reply by Utica Shale on March 19, 2013 at 4:39pm

"... Sorry to hear about that 12.5%, instead of the 21% ...

I never said that I had a 12.5% lease.

Unfortunately, I do know many who do and that is why I am biased at 12.5% net

Your results will vary.

 

" ... if you had a real lease with 21% royalty ..."

I do have a "real" lease, as you say.

And I certainly would not have that kind of attitude towards my neighbors that don't.

 

Maybe I am just old school ...

Under promise and over deliver - a nice surpise

 

making assumptions can lead to ...

over promising and under delivering - a disappointment