Replies to This Discussion

Permalink Reply by Steve Madsen on April 6, 2014 at 1:30pm

Sounds like B.S. to me Mary Ellen. I have been in the mineral acquisitions biz here in Ohio for 4 years now, & I've never heard an offer that high. Where is that post?

Permalink Reply by David Cain on April 6, 2014 at 2:50pm

Steve,

I think $19,000+ in Guernsey county Millwood township is legitimate.  Check out this link:Guernsey County Millwood Township

After reading it I contacted KWG&D and was told the same thing.  I can't confirm it 100% since I did not sell my rights.  But I would think if these guys were doing a bait and switch that they would lose credibility fast.  If you don't mind me asking what is the highest offer you are aware of and where was it located?  

Personally, I would encourage anyone that is considering selling their minerals to get as many offers as possible.  Some companies may be more interested in your location than others are.  You need to be thorough since you will only be selling them once.  And of course the dollar offer is only part of the consideration.  You need to consider the entire contract as well.

Good Luck,

Dave

Permalink Reply by mary ellen on April 6, 2014 at 4:11pm

Thank you for confirming what I had read in February.  The purpose of GoMarcellusShale is for mineral owners to share information so that we can all benefit from others' experience and make wise decisions. Mineral buyers have no incentive to share anything, unless it is to their benefit. Let's keep talking. I still don't know the going rate for southern Carroll County. 

Permalink Reply by Steve Madsen on April 6, 2014 at 8:59pm

Dave,

The highest offer I've seen as of late was $14,000.00 per acre. The property was located in Monroe County's, Seneca Twp. This was a deal that I helped put together, it consisted of 430 acres scattered throughout the township. About half of the acreage was HBP with a 12.5% R.I., & the other half had a 20% R.I. The HBP acreage purchase offer was $7,000.00 per, & the higher 20% R.I. offer was $14,000.00 per.

I'm not going to say what the starting offer was, but after about a month of stiff negotiations & B.S.ing the deal ended up falling through.

If you or anyone you know is interested in selling all or just a portion of their R.I. send them to me. I have worked for several wildcatting opps, & have recently begun acting as a "Hotwire" so to speak. Putting mineral capitalism to the test for Landowners.

Permalink Reply by Ryan N Nyardy on April 8, 2014 at 2:44pm

   $19,000/nma in Millwood Twp/Guernsey County isn't unheard of, but by no means is it the "norm". If we're talking a large tract, in a unit that has been permitted, held under a good lease, by a good producer, then I'd say $19,300/nma is an obtainable figure. I'm guessing it took several weeks (if not months) of tough negotiations on the part of the mineral owner to get to that point as well. To pay that high of a price, the buyer would have to be convinced that they were going to recoup their investment in a somewhat timely manner... That's what it all boils down to: Risk vs. Reward. Is the chance of getting said mineral acreage produced worth the risk if it does not??? If this LO had a 20% gross lease, it comes out to just over $1,000/RI%/nma. Taking into consideration the fact that $1000/RI%/nma is somewhere between 25-30% higher than the average evaluation of minerals in that area of the shale play, there must have been some seriously favorable extenuating circumstances attached to the acreage and/or lease, to have boosted the buyer's confidence in the ability to recoup the investment, and furthermore profit from it. 

Permalink Reply by mary ellen on April 8, 2014 at 4:20pm

Nice try mineral buyers. The cat's out of the bag.

Permalink Reply by Ryan N Nyardy on April 8, 2014 at 4:26pm

Mary Ellen, I'm not sure if I'm following... What "cat" are you referencing?