Replies to This Discussion

Permalink Reply by craig on January 24, 2016 at 4:51am

Thing is Gary since the leases were bought RRC can simply re-up them under the same old lease without any changes. There is nothing a landowner can do from my understanding unless their lease doesn't allow a top lease after the expiration of the original lease. I'm pretty sure there are no or very few CHK leases that are not allowed to top lease.

Permalink Reply by Todd on January 24, 2016 at 5:08am

Craig,

I researched the Recorder's website yesterday and what you are saying is not accurate; Range is simply top leasing on existing CHK leases that have been due to expire in 1 to 1.5 years ahead of time in many cases. Hence, Range has not purchased the existing leases from Chesapeake. They are merely paying a lower price now compared to what folks would receive later. So, they are paying folks to sign now but their new Range lease will not commence until say 9 months from now, for instance.

To be clear, it is absolutely the landowner's decision if they want to sign a top lease or not. Even though it is exciting to switch to Range, I would not recommend being in a hurry to sign anything that will affect the royalties of generations to come -- my advice. And joining with your neighbors will increase negotiating power; hence, the early top leasing.

Permalink Reply by craig on January 24, 2016 at 6:45am

Jeff and Gary both stated that RRC was buying their CHK lease. If that is not the case, then you are absolutely correct. 

Permalink Reply by Todd on January 24, 2016 at 7:17am

Craig,

Good point -- I wonder if Range is using that wording because that is inaccurate and misleading that they are buying Chesapeake's leases. According the the Recorder's website, Range is simply top leasing and commencing their own lease after the Chesapeake leases expire.

Permalink Reply by jeff on January 25, 2016 at 4:10pm

If RRC did in fact buy my CHK lease, they have the right to extend it, same terms. If they are top leasing I will indeed get legal representation. Their land man said something about some kind of deal going down with CHK in Feb. They also contacted my brother,who signed with CHK when I did. Meeting land man on Wed., will update then,when I know more. This does look like good news for us on this side of the river.

Permalink Reply by jeff on January 25, 2016 at 4:10pm

Will let you know terms they offer if they are trying to top lease.

Permalink Reply by Todd on January 26, 2016 at 7:46am

Jeff,

Thanks for keeping us updated. I do not see any Chesapeake lease assignments to Range on the Recorder's website so it does not appear Range bought anything from Chesapeake.

Again, I recommend that you do not sign anything from Range until you have a highly experienced oil and gas attorney review it.

Permalink Reply by jeff on January 27, 2016 at 4:18pm

Met with landman from Shale Services, representing RRC. Usual landman BS about how this is the only and final offer you will receive. Said RRC was buying up CHK leases because CHK was not renewing in this area. We know RRC didn't buy anything (thanks Todd) they're top leasing. Said there would be no drilling activity in our area for 3 &1/2 to 4 years. Offered 5 year lease 17%,$2500/acre, not renewable, nothing for first year (good faith on my part), $625/ acre for final 4 years. Left a copy of lease to look over. To be fair, there are several improvements on my original CHK lease but I would never sign this in it's present form. Will have gas & oil attorney look it over and draw up counter proposal. Same offer to my brother on adjoining property.

Permalink Reply by Todd on January 27, 2016 at 6:04pm

Jeff,

Did you read the royalty payment section of Range's standardized form lease that they offered you to sign for no money over the next year? I see a laundry list of post production costs and you can also pay your share of any government imposed taxes. Hence, you can expect to be paid about half of that 17 percent in royalties, give or take, at Range's own discretion. Now is the worst time to sign an oil and gas lease with the prices as low as they are. However, the EIA predicts much better gas prices in the next 1 to 2 years due to industrial and chemical production demand primarily, not to mention exports. All of those that wait to sign and join together now will reap the long term financial benefits of waiting until the time is right and demand is high -- exactly what Range does not want as they need to fulfill their pipeline contracts.

Accept my friend request and I can help you if you like.

Todd

Permalink Reply by Jason on January 28, 2016 at 2:22am

Jeff- I've been a member on GMS for several years now. There are two members on this thread that are educated, informed and know where the industry is headed by reading endless industry quarterly financial updates and talking to the workers on the ground now.

Todd has helped me with my own lease issues as my lease expires in a year with CHK and Range is knocking at the door and my neighbor's door.

Post production costs will take thousands of dollars out of your pocket monthly. Don't believe me? Look up Ron Hale's name on GMS. He has his own Ricco lawsuit filed against Chk in Ohio with Chk's own spreadsheet showing theft.

This will be the last lease you sign as our area is ready to explode with development in the next 2 years and beyond.

Hope you talk to Todd, Craig and Ron. Because you're in a position of power right now. And I won't sign that lease as it is. I'd rather not give away what I know it's truly worth.
Best of luck!
Jason - hanover Twp

Permalink Reply by Todd on January 28, 2016 at 4:31am

Jason,

Thanks for the compliment but there are more than 2 people who have a good understanding and have contributed to help Jeff under Gary's posted discussion -- Gary being one of them. And everyone that asks and answers questions is contributing to helping everyone. The folks that may be further along in understanding and research can not help others unless they ask and see where they need education. In addition, I know that there are several well informed landowners that are reading this thread. Most importantly, landowners in general, especially farmers, have a great deal of common sense and intelligence to be largely self reliant. Farmers are the salt of the earth and are my favorite people to help because they appreciate the most and understand that I am only trying to help them as I have done for decades as a healthcare professional and now I see an opportunity to further help folks that need it in order to save and maximize their families' hard earned claim to what is rightfully theirs.

Permalink Reply by Todd on January 28, 2016 at 5:26am

For all landowners who need help to fix their leases, feel free to send me a friend request with a message and I will be happy to get you my oil and gas attorney friend's contact info. He has over 15 years experience in practicing oil and gas law -- way before it was popular to do so. Most importantly, he has a passion for helping landowners save and maximize what is rightfully theirs.

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