Replies to This Discussion

Permalink Reply by James on January 20, 2016 at 10:48am

Dennis,

These are the numbers you do not see:

In December, RICE had to sell stock ($33,000,000) to pay back Morgan Stanley.

Active wells have decreased by 62% from their high in 2012. Their is no record how assets keep growing. (By 200% in a year) Mineral leases do not fall under this.

The company is operating at a loss for the past 3 quarters.

I hope they figure out their problems for the people of Belmont county. 

This is why a public company has to make the newspaper and a private company does not want anyone to know what they are doing. 

See for yourself my friend. It does not matter to me either way, I just want you guys to know since I grew up playing in the creeks and mud in Glencoe. Good Luck!

https://prismic-io.s3.amazonaws.com/riceenergy%2F68d3eb66-358d-4334...

http://finance.yahoo.com/q/bs?s=RICE+Balance+Sheet&annual

Permalink Reply by James on January 23, 2016 at 7:36am

"Lessee covenants and agrees: 

Deliver to the credit of the lessor, his heirs or assigns, free of costs a royalty of 20% of the native oil produced and saved from the leases premises , with the exception of non-commercial nuisance oil and delivered at the wells or into the pipeline to which the wells maybe connected."

Same statement for natural gases except gross amount words for 20% royalty at the well head. less any incurred taxes and third party charges. Gas sold at the well is 20% of the amount realized by lessee.

Thanks again for the information Dennis , I had none on pricing before these replys.

Permalink Reply by LERRET on January 23, 2016 at 6:43am

XTO has not been the most efficient driller in many basins. They are average, perhaps slightly above. They do have deep pockets. But they also have lots of lawyers and you do need to vet the terms very closely. Post-production expenses will eat most of your royalty - especially during low product price times and as the well ages.  Look for the effective royalty to be about 10% except perhaps during the first few weeks of production.

However, once production declines along with your check keep in mind that each drilling unit will support multiple wells. They may be well into the future before you see additional wells drilled so don't think your lease is "worthless" once checks dribble down to a few dollars a month. Sooner or later other wells get drilled and the income jumps up again, and of course, declines accordingly over time.

Permalink Reply by James on January 23, 2016 at 7:26am

Thank you for that information also Lerret. I believe we may be the only lease for 20% royalties whereas most other people signed very early on for 12.5%. I am not sure if that makes a significant difference or even works the way I mathematically broke it down. Anyone have any familiarity with that situation?

Permalink Reply by James on January 19, 2016 at 6:45pm

What if rice energy offers 5000 per acre and xto 4000 per acre? Do you want a company with limited resources oh I would say in the neighborhood of 500-900 mil vs a company backed by Exxon mobile with technology most likely soley owned by that company? When it comes to Royalties, which will have the better technology? Which will stay in business if natural gas price continue to trend downward past 1.50? My family knows from experience what rice is willing to do with the abandon mineral rights law , even if they utilize it incorrectly ! I am not in the fraccing industry though, maybe someone could respond with evidence who knows more on the subject matter.

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