Halo Land and "Delay Rentals" Payments

A guy from Halo Land approached me and said that they was working for Ascent.  He offered me $700 per acre, each year up to 10 years, and said that they wouldn't pay it up front. I guess they pay me every year the $700 per acre, and they can cancel any time?  He called it a delay rentals.

Is Ascent the only ones out here offering a crazy delay payment.  I wanted to see if anyone else was getting approached with the same nonsense?   This seems like a bad deal because the price could go up and I am stuck with the $700 for 10 years!!  

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Permalink Reply by lance on September 9, 2016 at 1:02am

Thanks Soundcraft, for the wise advice.....

Permalink Reply by lance on September 8, 2016 at 5:45am

Hi Brett, what township are you in? I'm in Wills

Permalink Reply by bo boboski on September 8, 2016 at 6:53am

Some people are saying"hey,where do I sign". unaware!

Permalink Reply by Barry D on September 10, 2016 at 2:08am

Brett,

You should already have been speaking with your neighbors about this issue.

Find out what they have been offered, have any of them signed already.

Beyond the bonus money you should also be looking at the terms of the lease.

There is strength in numbers, if you and your neighbors work together you may be able to resolve your issues quicker and more to your advantage.

Be aware that the company will only offer so much.

Permalink Reply by mark alters on September 10, 2016 at 5:32am
Where are you at?
Permalink Reply by Kyle Nuttall on September 12, 2016 at 4:55am

Lots of good advice here already.  I'd just like to add a couple things.  First, 10 years is double the going rate down here in West Virginia, and I'm reasonably confident that 10 years is double the going rate in Ohio still.  I don't work in Ohio so I can't say for sure.

Second, you can structure a delay rental to benefit you.  The Paid-Up Lease that everyone likes can put you into a higher tax bracket.  Talk with a CPA about how you can minimize your income tax liability.  Talk to an attorney who does a lot of oil and gas work about how to draft the lease.  You won't be sorry if you get someone who's good.

From reading all the comments it looks like the "Just Say No" technique has worked out for you.

Seriously consider getting together with your neighbors to negotiate.  That's one thing I've been trying to get people in West Virginia to do.  The old saying, "the more the merrier" is very true when negotiating with oil and gas companies.

Permalink Reply by WV Mineral Owner on September 12, 2016 at 5:04am

Kyle,

I agree with all of your points, but will add another point of view.  I agree, 10 years is too long of a term for a binding lease, however there are countless leases that are for 5 years with an automatic renewal for an additional 5 years.  For some reason, people look at the latter differently than a 10 year lease, which equate to the same term in my eyes.

Fortunately, I have been successful in limiting all of my leases to 3 or 5 years, without a renewal clause.  Most production companies throw temper tantrums, but accept the shorter lease term.

Mike MurphyPermalink Reply by Mike Murphy on September 13, 2016 at 5:27am

API WELL NUMBER: 34059243910000
OWNER NAME: ASCENT RESOURCES UTICA LLC
COUNTY: GUERNSEY
TOWNSHIP: LONDONDERRY
WELL NAME: LAWSON LND GR 2H
WELL NUMBER: 2H
OIL (2015, Q1): 37,178
DAYS (2015, Q1): 64
OIL (2015, Q2): 50,657
DAYS (2015, Q2): 91
OIL (2015, Q3): 41184
DAYS (2015, Q3): 92
OIL (2015, Q4): 27967
DAYS (2015, Q4): 92
Oil 2015 TOTAL: 156,986
Days Producing TOTAL: 339
API WELL NUMBER: 34059243790000
OWNER NAME: ASCENT RESOURCES UTICA LLC
COUNTY: GUERNSEY
TOWNSHIP: LONDONDERRY
WELL NAME: LAKE LND GR 4H
WELL NUMBER: 4H
OIL (2015, Q1): 34,841
DAYS (2015, Q1): 84
OIL (2015, Q2): 43,269
DAYS (2015, Q2): 91
OIL (2015, Q3): 28757
DAYS (2015, Q3): 91
OIL (2015, Q4): 19130
DAYS (2015, Q4): 91
Oil 2015 TOTAL: 125,997
Days Producing TOTAL: 357
Permit Issued: 05/23/2014
API WELL NUMBER: 34059242910100
OWNER NAME: GULFPORT ENERGY CORPORATION
COUNTY: GUERNSEY
TOWNSHIP: LONDONDERRY
WELL NAME: MILLER 2-25H
WELL NUMBER: 2-25H
OIL (2015, Q1): 25,976
DAYS (2015, Q1): 50
OIL (2015, Q2): 44,877
DAYS (2015, Q2): 91
OIL (2015, Q3): 33991
DAYS (2015, Q3): 91
OIL (2015, Q4): 30187
DAYS (2015, Q4): 91
Oil 2015 TOTAL: 135,031
Days Producing TOTAL: 323
Permit Issued: 07/23/2014
API WELL NUMBER: 34059243700000
OWNER NAME: ASCENT RESOURCES UTICA LLC
COUNTY: GUERNSEY
TOWNSHIP: MADISON
WELL NAME: RED HILL FARM MDS GR 3H
WELL NUMBER: 3H
OIL (2015, Q1):
DAYS (2015, Q1):
OIL (2015, Q2):
DAYS (2015, Q2):
OIL (2015, Q3): 48700
DAYS (2015, Q3): 66
OIL (2015, Q4): 59502
DAYS (2015, Q4): 92
Oil 2015 TOTAL: 108,202
Days Producing TOTAL: 158
Permit Issued: 05/07/2014

Permit Issued: 06/13/2014
THEY HAVE ONLY TOUCHED THE  EDGE OF THE OIL WINDOW
Total of 19 wells in this area over 100,000 barrels of oil each in 2015 some of them done it in less then 6 months time ....go to uticashalemaps.com and go to production and work the interactive map and you will see them and the ones near SCIO too and the big gas producers near the river.... these companies are trying to BUFFALO  mineral owners ......If you have a good lease stand your ground .....if they don't renew it won't be long and somebody will lease you....and I would ask for more bonus and more royalty %
Permalink Reply by bo boboski on September 13, 2016 at 9:15am

you are right. just touching the oil window and having great results. Just wait till oil goes back up to $70./$80. Then they will get interested and they are hoping to talk a bunch of unsuspecting landowners into some crappy leases in that window.

Mike MurphyPermalink Reply by Mike Murphy on September 13, 2016 at 1:21pm

if you look around these big oil producing wells they have thousands of untouched acres that they are trying to portray as not so good look west of the big producers and you will see virtually no wells drilled

Permalink Reply by bo boboski on September 13, 2016 at 1:47pm

Salt Fork State Park's 21000 acres may be sitting on the motherload.

Permalink Reply by lance on September 14, 2016 at 1:11am

Legislation was passed recently to allow drilling under the Interstate hi ways maybe now the State Park acres are gonna be next and this is why the land close to and adjacent to state parks is so desirable.

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