Where's all the people that advised everyone the moneys in the royalties not the bounus?
Is there any chance there will be a turn around and the land owners will actually get what they were promised? Riches in the royalties. I remember it well. Back yard lawyers. "Don't give the lawyer any percentage give them $per acre" Well at the last minute I had a choice and went with giving the lawyer %1 of the royalties. He hasn't got nothing yet and, the $350 per acre is in my pocket. Well it was till I spent it all down to the level I was at before I was rich. (I wrote about that before how hard it is for anyone to hold onto a wind fall) At the present after 3 yrs I think it was the right choice and, when the gas co. starts cheating me my lawyer has an interest with me and many others in our group to try to fight for us. That 1% of a group will line his pockets pretty good.
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Replies to This Discussion
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Permalink Reply by Joseph-Ohio on
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Good to read.
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Permalink Reply by DESJR on
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Hiker, what county are you in if you do not mind sharing. Me, I am in Belmont. Not unitzed yet with less than 2 years to go. My bonus was a bit more than yours, but not a lot.
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Permalink Reply by The Hiker on
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DESJR; I'm right below you in Noble. Belmont has some amazing wells drilled by Gulfport, so it's a nice spot to be in. Some of the investment opinions I've read point to "takeaway" as being one of the problems depressing the E&P stock prices; not enough pipelines or processing plants to handle the volume. When this is fixed, things are going to open up, especially in Belmont IMHO. Raising the gas price is quite another problem, however. LNG exports, power plant conversions.....it will be a while.
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Permalink Reply by Joe on
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So. No one wants to come forward and admit they told everyone the money was in the royalties....Or voted for Obama.
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Permalink Reply by Joseph-Ohio on
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I read it here and heard it elsewhere.
But didn't vote for the current POTUS.
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Permalink Reply by G.H. on
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Perhaps the people who were saying the money was in the royalties were saying "since we don't know what exactly is under you yet, it could be worth it to negotiate a higher royalty instead of higher signing bonus." That, of course, would have to be in earlier stages of the play. Remember that the "sweet spots" have shifted and become more concentrated several times through the years. So they would be right, in the good areas. And wrong in the not-as-good areas.
Just a thought.
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Permalink Reply by 1s7k1qp9wk1t7 on
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I told you all to SELL half of your rights....worked for me. And I sold to a helluva good partner. Got almost a half million on the signing bonus...then sold half my rights for a million....now I'm up for renewal in April because we still haven't been unitized and we WILL get renewed because we are in the middle of the pickle. I'm in no rush for royalties due to low low commodity prices.....bird in the hand people
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Permalink Reply by Joe on
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I've thought about that lots of times with all the offers that came in the mail but, I thought they were all shysters/flippers. "We will buy for xxx$ till you call them then it turns out to be a boiler plate offer. That's why it went no further with me. How many pre approved letters do you get from low life's in the mail for credit cards and cars? If they have a serious buyer then knock on my door with a check in hand!
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I went with Siltstone Capital....they have the clout, bucks and lawyers to take on CHK if they play games with the royalties....and you know they will....but they don't with people who have the ability and resources to fight back....individually we are powerless....just read the posts on this site....if you have any doubts read any of the posts from hail storm Hale :)
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Permalink Reply by bo boboski on
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Easy for you to say, sitting on 1.5 mil. with 100 acres M/L.in the pickle!
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I've seen numerous projections from within and outside of the industry that show the per acre production value of Marcellus acreage over the lifetime of a well, and it invariably returns more value than what is paid as a bonus (even of the $5k/acre plus variety). The key word there is "lifetime."
What we're seeing now is a relatively short (historically speaking) downturn in prices which is obviously affecting returns. From what I have, and continue to gather, the problem is two-fold.
Part 1: oil and gas companies descended upon us in an effort to snatch up as much acreage as possible. Now that they have it, they need to produce it in order to keep it. Otherwise, millions of dollars of investment will disappear upon lease expirations. So what we're seeing is a tremendous amount of production without the required demand.
Part 2: demand is lagging because there is a severe lack of pipeline infrastructure to transport the gas to markets where it can be most profitably sold. We have a lot of gas going to few markets: we have a bottleneck. That is why we're seeing all of these planned major transmission lines: think Rover, Leach Xpress, Mountaineer XPress, Mountain Valley, Atlantic Coast Pipeline.
So what does this all mean? It means that while royalty payments may be underwhelming now, they'll rebound once demand catches up to supply. That'll begin to happen when these pipeline projects are operational. At least that's the short of it in my opinion.
In the meantime, we're seeing evidence of supply purposefully slowing in some instances with oil and gas companies throttling back production for producing wells, shutting-in wells, and/or drilling wells and paying delay in marketing payments so that they can sell gas at a better rate in the future.
In my opinion, to say that the money is in the bonus and not royalty because of the downturn in prices over the last year or so is short-sighted to say the least.
And if that doesn't make sense, think about this: in all of my experience with the oil and gas companies, the one thing that is the "deal breaker" in any lease negotiation is the royalty clause. The oil and gas companies care about money, so it says a lot when that's the one thing they'll absolutely fight me tooth and nail on.
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Permalink Reply by Joe on
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My be it's the nature of the beast but, it appears to me the Marcellus boom had little organization or thought for the future. Where did they think they were going to sell the gas? They, someone knew the pipeline infrastructure wasn't in place they didn't have a clue how this boom was going to play out. Or did they? Maybe the master minds of this boom did reap the cream off the top of this Marcellus boom lining their pockets with gold and sticking it to the investors that didn't have a clue as to how it was going to play out.
As I said before. Where did they think they were going to sell the nat gas. We only need X amount of gas. Producing more lowers the price according to supply and demand which may lead a consumer to turn up the thermostat up a notch but where did everyone think the gas was going to go? Even at rock bottom prices it's a quick sale competition between producers.
Yes we need nat gas autos, machinery and power plants which is slow coming. If you were going to invest 900 million into a nat gas power plant to produce electric because of the abundance of gas at low prices, people who have engineered and invested in power plants for a 100 years of history lessons......screech....halt... wait... It looks like these gas people are trying to build pipe lines and LNG plants to export every bit of gas they can produce to drive the price as high as they can possibly make it bringing back more drilling, carpet baggers, immigrants, driving up local inflation till they have drove the price of nat gas way higher than it has ever been sucking our nat resources till it's all gone.
I will NEVER believe anyone that there is an unlimited supply.
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