Our lease will be up soon and SWEPI has sent us a new offer of $1000 per acre / 12.5% royalties for 10 years. Our old lease was $2000/15%/5 years. Trying to find out if this is the going offer and if anyone is having any luck negotiating with them.

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I'd roll that offer up into a tight tube,send it back, and tell them to shove it up where the sun don't shine.  just sayin.

Since you're in PA and thinking Tioga County (since that's the PA GMS Group you belong too); I'm thinking further that to be a 'Dry Gas' area.

Can you confirm that ?

Any oil and / or NGLs out of any wells in your area I wonder ?

Thanks neighbor.

J-O

PS: Your Post really got our attention since we're in Richmond Township also BUT......in Richmond Township, Ashtabula County, Ohio.

Kindly keep us all advised.

Thanks again neighbor and wishing you the very best of luck in all of this.

You can do so much better than ithis initial offer.  A simple "no thanks" is all you need to tell SWEPI.  They will be back on your doorstep several times,because Richmond +'s "rich".  You will not be passed by.  Just be aware they can play hardball.  10 years is absurd!

Did some more digging on your behalf.  Leasing isn't happening right now because companies don't have enough take-away capacity to match production. Pipeline shortage and so many leased AC yet undrilled  (like your current ones)  that only the most pitiful leases are being offered landowners.

This could all turn on a dime, but for now I'm suggesting patience.

SWEPI is just trying to hold onto what it already paid for once.  How many of your AC are they making thieir offer on?  

We have 170 acres. A reprehensive from Long Consulting is meeting with us next week to discuss their offer. We are definitely not signing for anything less than the current lease. We told them that and they still expressed interest in sitting down with us to discuss it.

They are DEFINITE:Y interested in keeping your AC in their pocket if the interest conveyed is something you ca take to the bank on paper.  Sit down w/a lawyer and ompare the new offering in print w/the older one.  The industry's situation has changed considerably since you siigned the first lease.  It's a whole new ball game.  Your conversation with the company rep should reflect that.  Keep in miiind where his paycheck is coming from.

I'm guessing if your lease is cllose to expiring so are many others.  What are neighbors being offered?  Early leases went for $10 AC up to $2,000+ once the Marcelllus potential was realized, and now the Utica is even sweeter. Were you part of a landowner's group the first time around?  

Natural gas development in Tioga is way ahead of where my AC is in Potte &/McKean is..  We're all dealing with the geology Mother Nature provided us.. It's going to be there long after "the cows come home".  I hope you take your time before making any permanent decision..

Landowner Groups are not a thing of the past.  Nose around for active ones along the NY/PA border.  Glad to see your homework has begun.  Good job!

We received the same offer for property in Middlebury Township. We are in the Root Group and there is a meeting to discuss this 11/24/15 at the Fair Grounds. I am sure all are welcome. The bigger we make the group, the more power we have to bargain.

Are these offers of a 12.5% royalty with deductions?

The offer we received was 12.5% with deductions.   Just a letter, no one has been to see us yet.  they tried a year ago but when we wanted more they just stopped. Our old lease is much better and still has some time so no reason to take less. I feel  they are trying to tie up acres while prices are low. I feel 10 years is to long to tie up this cheap.

When a lease has the possibility of deductions - whatever they are - what difference does the royalty number matter? I am not being sarcastic when I ask this. I know the signing bonus is a factor but that aside what difference does the royalty percent number mean when there is an open ended deduction?

Reading ya' loud and clear.
Because you want the deductions to come from 18% rather than 12.5%.

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