my 10 year lease expired with Ascent Landman called

My lease is expiring in PultneyTwp ,Belmont County

Land man offered $3500/ acre. Previous lease.we got ,$6800. Does Ascent have me by the short hairs or do I have them? They had a descent amount invested in first term and 2nd term renewal. What should I do? Let it go? If decide to drill and I lease to someone else it will probably cost them alot more to buy it up from 3rd party? Also arent these land leases.collateral for all their lenders?

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Permalink Reply by Dott on January 11, 2024 at 6:14am

From what I can tell bonuses are not near 6800 anymore however if you have this opportunity you may want to get your lease reviewed by an Oil and Gas Attorney unless you did this with the lease when you first signed it. Many leases from the past had deductions written in and not Gross. Some had a Marketing Clause which made it appear that you had a No Deduction lease but the companies used the language as a Loophole to take deductions. There was even recent court action on this. If they are coming to you to renew they must be planning to drill your area because most companies are not spending bonus money on speculative acreage like they did 10 -13 years ago. They lease to drill and there is a lot of drilling going on these days and more to come. Ask around see if there are others companies looking to lease your area. There may be more leases about to expire. Ascent may be happy to pay you 3500 if they see your lease language favors them.

Permalink Reply by adam sorell on January 13, 2024 at 12:34pm

He offered $3500 and said it just a starting point. I was in a land group had a good lease 20% gross at well head no deductions.Ill be sticking to that. If i dont sign a lease i guess they have to take me to court.??? I dont think the Utica is "specualtive" its proven ,no?

Permalink Reply by Dott on January 13, 2024 at 3:00pm

Adam, "Gross at the Well Head " should not be used in new leases even if you think you are getting no deductions. Courts have ruled on this in favor of the Producers to be able to deduct due to the language. I have an article here that may clarify if I can get it to post. But I am sure you can find many articles on the web if you research.

Again if Ascent is that interested in paying you that kind of bonus they must be serious about drilling in the near future. Please get a FREE 30 min consultation with an OIL & GAS Attorney and just review with him your Royalty Payment Language and see what he says. I can give you the name of my Attorney who is reasonable and easy to work with. He is in Columbus, Ohio and may be able to help you. Cody Smith with Emens, Wolper, Jacobs & Jasin Law Firm  614-414-0888

Here is an article FROM A DIFFERENT LAW FIRM THAT I FOUND

https://www.rothmangordon.com/beware-of-the-use-of-words-in-conjunc...

Permalink Reply by Dott on January 13, 2024 at 3:08pm

The Operators used language in the leases 10 years ago to pull one over on us and they are trying to do it again but with different  language. If you don't sign a lease you may eventually be "Pooled" into a Unit at a Unitization Hearing. That will not be in your favor because then the Operator only has to offer you the bare minimum royalty set by the State. Yes you can negotiate up to and after the Court Hearing but you lose your leverage.

Permalink Reply by adam sorell on January 14, 2024 at 10:45am

thank you Dot. i have to dig up my lease see what it says exactly. But if i leased to a middle man flipper. Ascent would pay them way molre than im asking. I remembrr ten years ago fake drillers jaut buying up leases.to flip. ascent bought thoae flipper leases for $12 an acre when going rate was $5-7500 an acre.

I dont know hoe serious they are but inwas told they have proposed a unit Janovich but no plans to drill this year

Permalink Reply by David Cain on January 15, 2024 at 1:47pm

Adam,

I agree with Dott - she gives a lot of good information on this site.  I don't know about Eastern Belmont county, but on the western side of Belmont the numbers I hear are in the $4,000-5,000 range.  In the end, you should only settle with numbers that you feel comfortable with.  However, one thing to think about:  At the beginning of December I was listening in on my first unitization hearing.  A couple of landowners were objecting to the proposed unit because the new unit would leave these landowners parcels (75-100 or more acres) stranded due to an existing unit that was already to the south.  While it wasn't clear why Ascent chose not to pursue these acres, I wonder if it was because the landowners were playing hardball and wouldn't budge on their asking price.  If the unit is approved as is then these stranded landowners will probably never be drilled on or receive any royalties.  Good luck to you!

Ascent didn't try to unitize these 

Permalink Reply by David Cain on January 15, 2024 at 2:23pm

Adam,

Please ignore my last line above "Ascent didn't try to unitize these"  - I don't know how that got in my response.  I also want to clarify the $4,000-$5,000 signing bonuses that I am hearing about are for a 5 year primary term and then another $4,000-$5,000 if the oil and gas company decides that it wants to exercise the secondary 5 year option (if they haven't already drilled).  You stated that you had a 10 year lease with a $6,800 payment.  Not sure if you got one payment of $6,800 for the whole 10 years or a second $6,800 payment after the first five years.  That may play a factor in your decision.  Again, good luck to you.

Permalink Reply by adam sorell on January 15, 2024 at 6:19pm

$6800 for first term 5 years then $ 6800 for another 5 years

ill talk to the lawyer than did the lease for our group.It was a good lease. Im not desperate for cash. Maybe when it expires ill get competing offers. There a xto well 2 miles up the road Wassman Unit and Fleagane is close by too.

i dont know if these are good #s but ..

Wassmann

County Belmont County, OH
Production Dates Jul 2016 - Sep 2023
Total Oil Production 0 BBLs
Total Gas Production 19,044,357 MCF
Recent Oil Production 0 BBLs in Q3 2023
Recent Gas Production 4,694,292 MCF in Q3 2023
Wells on Property 7

Key data points for Fleagane

County Belmont County, OH
Operator ASCENT RESOURCES UTICA LLC
Production Dates Oct 2021 - Sep 2023
Total Oil Production 0 BBLs
Total Gas Production 37,984,909 MCF
Recent Oil Production 0 BBLs in Q3 2023
Recent Gas Production 7,481,894 MCF in Q3 2023
Wells on Property 8

Permalink Reply by adam sorell on January 15, 2024 at 6:47pm

i was on land group with probably hundreds of landowners. We all probably had our leases expire. Ascent going to lose or already lost  millions. 

Permalink Reply by Joe C. on January 16, 2024 at 12:21pm

Adam, I used Nick at AMCO. 23 year Petroleum Landman. He helped me with lease and reviewed area. He can lay out units even though nothing is proposed yet. Knowing how operators develop them, he can show if you’re in the fairways or close to unit boundaries. Email is ncriado@amcooilgas.com

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