Recent leasing activity?
What is the current leasing status in the NW PA/SW NY areas? With many companies rescinding offers is there anyone active out there leasing? If so, what is being offered?
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Replies to This Discussion
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Permalink Reply by Rita McConnell on -
With the price of gas where it is now, there aren't too many companies out there leasing like they were in the fall -- everyone is working with what they've alrady gathered in most cases. There are opportunities out there for those who own parcels that abut areas where large tracts of land have already been leased. Most companies are now suring up property and leases to begin drilling when the weather clears Most want a number of parcels adjacent to one another to allow for a 3,500 foot horizontal line through the formation from where the well/wells are drilled. There are also needs for rights of way and the like. So while there is no agressive land leasing going on right now in most places, there could be some visits to land owners from companies surig up their holdings for work ahead.
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Permalink Reply by 1976cobra2 on
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Current offer on 2/27/09 :Broome county NY -CHK $100/15%/10 years .Pathetic as compared to last summer, but they are leasing now.
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Permalink Reply by b bz on
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Most people don't realize what a gift it is when a mineral company wants to lease the minerals. oil, gas. coal, whatever, a mile and a half beneath their land. the company is paying you for the right to explore 8000 feet below the surface and agrees to pay you up front for the right , and get this, Give you a 15% or 20% over-ride on all Revenues right off the top with no costs on anything they find, with full accounting principles and regulation by the state, and surface agreements for damages to the land ond offset from homes etc.
..when you get a decent offer you should have taken it. Those who were greedy and tried to hold out for more and lost out for the next ten year cycle were probably foolish in hindsight. If anyone represented you and told you not to lease i.e.'( local attorney. local oil buddys etc.local farm buddy etc..), and hold out for some pie in the sky honey-hole amount, then you should go to them and demand they make good on their advice and pay you the lease money you didn't get because of their advice or consortium, look them right in the eye and watch their expression when you ask they make good on their advice. They cost you, and a judge will probably rule in your favor
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Permalink Reply by Brian Day on
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These land men are generally far from saints. People who work at other functions in the same companies will tell you that. The cycle will probably be more like five years instead of ten. When gasoline pricces rise back over $3 to $3,50 a ghallon, interest will renew in natural gas powered vehicles, especially if the Middle East turns off the tap. If a person can afford to hold out a little, prices should improve, perhaps not like last year, but better.
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Permalink Reply by Tom Copley on
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Hey, gasoline is over $3/gal in California right now!
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It's always higher out here. The refineries are required to make up a special brew for us, because we're trying to control air pollution--a big problem in metro SF and LA. What do you think about it, Roy? Personally, I'm hoping to afford a nice Honda Civic GX so I can proceed through traffic jams in the special diamond lanes provided for those with cars that meet Calif's super ultra-low emission vehicle (SULEV) standard, It beats having to look for car-poolers. -- Tom
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Permalink Reply by terry hazlett on
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prices are already improving in certain areas and summer isn't even here yet, have to look at it as it can only get better from here! rick what do you think is a fair price for a lease now? just curious what line of work are you in? could it be oil & gas , maybe landman? just curious.
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Permalink Reply by roy jones on
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Terry,
I thought I'd weigh in on this since I've had experience as a landowner in the area over the past 20 years (and I've followed this play very closely). I know this isnt the answer you want, but, it depends on where you are. Bigger companies are wayyy top heavy with too much acreage right now. They're definately only likely to pay good money on areas with current production or successful wells. So, southwest PA (washington, fayette, green) may have prices in the $400 range, while relatively unproven areas may be cheaper. The only places that have acreage prices around 1000 are right next to big producers. These are the times to disregard the initial bonus you get (because you wont get a lot of money for your acreage straight up anymore) so you should try to get a decent royalty. Maybe 15 % instead of the normal 12.5 %. That is where you make your money anyway, in the royalties. Most landowners do not understand this at all. The 30,000 dollars you'll get for your lease is nothing compares to the thousands of dollars you'll get every month if they actually drill on your land. What county are you in?
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Permalink Reply by Rita McConnell on
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Roy makes a great point. For someone who has a well drilled on their property or a lateral run underneath, the true value of the lease is in the monthly royalty -- the bonus payment, while in lump sum seems great, is really little compared to what can be made.
However, just beacuse you've signed a lease, and received a bonus payment, that doesn't mean a well will be drilled on your property, or a lateral will run underneath it. That depends on the geology.
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Permalink Reply by terry hazlett on
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Rita & Roy , i agree to a point about bonus money, with gas prices as low as they are now alot of wells even drilled already are being shut in, so it may be some time before you get any royalty payments! and if your older bonus money may be all you ever see , so there is two ways to look at it.
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