Utica Shale Leasing Price Per Acre
Oil and gas “bonus” rates or the price paid per acre for leases in the Utica shale play, (which allow a company to explore for two to five years), have risen dramatically in the past few weeks. Since Chesapeake Energy first announced in August that the Utica shale “may be one of the biggest oil discoveries in history”, county courthouses in Ohio and Pennsylvania have been flooded by “land men” who are pouring over deed records in an effort to find mineral rights owners and make them an offer. Here are some things to consider when approached by an oil and gas exploration company to lease your property. (The information in this article is not a substitute for qualified legal advice.)
Owners Of Large Acreages Have The Upper Hand In Negotiations
In other shale plays in the United States the price per acre has risen as high as $9,000 in areas with high concentrations of oil and natural gas liquids. Like the Eagle Ford shale in South Texas, the Utica shale in Ohio and Pennsylvania has a “sweet spot” between the heavy oil and dry gas zones, where large volumes of “volatile oil” or light oil, propane, butane, ethane and other natural gas liquids are found. It is in counties such as Columbiana, prices are headed north of $4,000 an acre.”Landmen” are individuals who work on behalf of oil and gas companies to locate mineral rights owners from information in county records, and make them lease offers. Once a lease is signed, the company has a defined amount of time, such as three to five years, in which to drill a well. If a well is made, the land then becomes held by production (HBP) and the landowner then receives whatever amount of royalty payments they negotiated for. If no wells are made, the lease ends after all renewal options expire.
Landowners who have several hundred or several thousand acres have the upper hand in negotiations, since oil companies want large tracts of contiguous land on which to drill the long horizontal wells, as well as dig frac water pits, etc. Unlike South Texas, the Eastern part of Ohio, where the Utica shale play is hottest, features many small farms and acreages. For these property owners it might be a good idea to join a landowner’s group, such as The Associated Landowners of the Ohio Valley, which has assembled 200,000 acres in Columbiana, Carroll, Jefferson, Mahoning, Trumbull, Harrison, Tuscarawas, Portage and Stark counties. (In recent weeks there has been an increase in leasing Utica shale acreage in Guernsey, Belmont and Noble counties to the south.)
Joining a landowner group is a good way for small to medium sized property owners to increase their bargaining power, since oil companies want large tracts of land. There are now several Utica shale and Marcellus shale landowners groups in Pennsylvania and Ohio. Some of these are “landowner’s groups” in name only, since they were started by attorney’s offices. Your best bet is to choose a group that is not bound to any one law office and governed by landowners themselves, who vote on each offer and the terms of the deal. So called “landowner groups” started by lawyers may end up costing you a good chunk of your lease bonus payment. It is beyond the scope of this article to endorse any of the Utica shale landowners groups, however the Associated Landowners of The Ohio Valley, website, is a nonprofit organization that was started at the grass roots level, not by a law firm looking to get rich. Even if you do not own the mineral rights below your land, joining such a group may help you negotiate a “surface damage” agreement, which will compensate you for land taken up by oil wells, tanks, pipelines, etc.
Things To Consider When Signing A Utica Shale Mineral Rights Lease
First off, landowners should understand the difference between selling and leasing mineral rights. Beware of those companies and lawyers who are now seeking out Ohio and Pennsylvania landowners, offering to buy all of their mineral rights. If you sell them, you will not get any future royalties from Utica shale or Marcellus shale wells on your property. You will essentially be signing all of your rights to future oil production away for a lump sum payment. This is a very bad idea if you are in one of the zones proven to contain oil and gas. Leasing your land for Utica shale drilling on the other hand entitles you to a “bonus payment”. The lease price per acre for Utica shale drilling rights is the “icing on the cake”. The real money will come in the form of royalty payments when a well is made. Make sure you negotiate for a good share of royalty payments. In South Texas the going rate for royalty is around 25% to the landowner. In Ohio’s Utica shale play, contracts from 12% to 25% have been written, but this is changing all the time. Belonging to a landowner’s group can help you stay informed of the going rate for bonus payments, and royalty percentage.
Key Lease Terms For Utica – Marcellus Shale Acreage
- You may elect to lease your property only to a certain depth. For example, you may lease the Utica shale to one company, and reserve the right to lease the Marcellus to another, if you are in an area where both formations are productive. Natural gas prices will rise again, and when they do the Marcellus shale will be hotter than ever.
- Make sure you control the water rights on your property. Don’t sign away your water rights for use on other tracts of land without being properly compensated at the going rate for water in your area. Utica shale wells will require up to 6 million gallons of water each to drill and complete.
- If you have multiple parcels of land that are separate from each other, you may not want to add all of them to the same lease. The reason being is that one well may “hold by production” all of the acreage, meaning it will be tied up and unavailable to lease to any other company if a well is made on even one small part of it.
For more information on Utica shale price per acre or leasing advice, consult with a local landowners group and a qualified attorney.
Share Your Price Per Acre For Utica Shale Leases Below
Please visit the Utica Shale Group on the Oil and Gas Mineral Rights Owner’s Forum to share information about current lease bonus amounts and other information with fellow landowners.
I noticed this in the newspaper: Rex Energy said in an Aug. 2 statement that the firm was spending $40 million on leases for 11,000 acres in Carroll County. The average lease bonus will be about $3,600 an acre. The first wells will be drilled next year, the company said.
The 11,000 acre lease was negotiated @ $3700 and, more importantly, 20% royalty. I have seen no one else get more than 18%
That amount is for the PURCHASE of the rights, NOT leasing which is much lower
We got 5,000 per acre and 20% in Madison twp Guernsey Co
I saw the Rex Energy release. I would love to know of any other sources you can point to that indicate per-acre prices at upwards of $4000. Thanks.
Saw this article: timesreporter.com/business/x426956805/Valley-landowners-cash-in-on-oil-boom which also indicated prices near $4,000. A blog post on one of the mineral rights sites mentioned price over $4,000 but not sure which county. Landowners groups seem to be getting the best deals so far. I’m surprised royalty percentage is so low compared to Eagle Ford in Texas which is supposed to be very similar in rock type
“The recent disclosures by those companies, which have long track records of ferreting out prolific shale formations, have helped propel lease prices to about $4,000 an acre, about double what they were a month ago and as much as eight times the rates at the start of the year, said Manuj Nikhanj, head of energy research at trading house Investment Technology Group Inc. ‘
Diana Marchese, country recorder in Trumbull County stated this (from Bloomberg article): “Agreements to lease land in Trumbull County started at a few hundred dollars an acre and have grown to $5,000″, Marchese said.
I don’t believe anyone in Trumbull has been offered, much less accepted, anything close to $5000. The highest verified price paid was by Marquette who outbid CHK and XTO for a 20,000 acre+ lease in Harrison, Belmont and Jefferson counties. That one went @ $3750. Rumor has it, and I believe it to be true, that Exxon is in Harrison county offering $4250. Harrison county only. I have seen no verification that anyone has received as much as $4000 anywhere yet, although some counties are definitely headed that way, and fast.
Just to verify, are the ~$4,000 per acre numbers being thrown around one time payments? I’ve heard of similar sounding landowner groups being offered somewhere in the neighborhood of $10 to $50 per acre, but I think that was on an annual basis (but still far below the $$$’s mentioned here).
CHAD: The offers, whether $25 (my neighbor-$50 or up to $5100 in Guernsey is a sign-on bonus for a 5yr, one time renewable, lease.It is not paid yearly, no matter how badly they ripped off my neighbors. After the bonus money, which is all you get unless royalties start rolling in from producing wells, there is no more money unless they do not drill during the five year window. At the end of 5 yrs (which we are assured will see all the wells/land drilled), if they so desire they can exercise their option for another 5 yrs, with another bonus payment for that extension.
Prices around $4000 acre have been paid for the right to lease property and explore for a period of 3 to 5 years, with renewal terms of 2 more years. These are being paid to some landowners in the liquids rich counties of the Utica shale – Point Pleasant interval play. Anyone considering selling mineral rights for $4,000 an acre or so in the wet gas – condensate – volatile oil window of the play would be crazy to do so in my opinion.
Rex Energy, Carroll County $3500 acre and 20% royalties.
Received meeting notice for Guernsey Co landowners for lease with $4800/ac bonus and 20% gross royalties. Two townships in Tuscarawas County are being offered $5000/20%.
As more wells are drilled and it becomes a proven play, we should see 25% royalties in Ohio, as are being paid in the Eagle Ford shale in Texas.
Not necessarily, the cost to drill, frac, and transport in many of the areas in Texas, where the production occurs,is less that up here in terms of dealing with the environmental issues. This area has inherent risks that are not run in Texas. Groundwater here – 25 ft – Texas 700-1100 ft deep, rainfall here, 40+ in/yr, Texas 24, or less right now, meaning not as many problems dealing with embankments, dirt work, etc. As well, much of the EF that is liquids rich is in counties where the soil make-up is very different than up here. As well, in the area that the EF liquids are being found, the faults that drive the variations run relatively cloce together and on one front, whereas up here, the faults are staggered so to say, and more difficult to predict. And, in TX where they are drilling, much of the area has had seismic run multiple times for the Austin Chalk that lies on top of the Eagle Ford, and much of that information is available to multiple users, unlike much of this up here, where the seismic has been held in private hands, mostlky due to the fact that it is newer and more sporadic. The areas that they are leasing and drilling in Texas also have numerous 10,000+ acre ranches. Which are often held through multipl leases due to their size. A few people may see the 25% royalties, but only if they are known to be sitting on the gold mine, and a planned well will be needing their tract to complete.
The Large Landowner groups up here can make that a problem, wherein companies are focused on an area, and they want the land in that area, but the group has land in multiple areas, as long as the groups can adapt and parce the land out to multiple drillers, the concept will be more viable as the play matures.
Funny, so many people up here think that landowner groups is where it at, and they all pint to how high Texas royalties and so forth are, but you don’t have the landowner groups in Texas – now why is that? (although there were some in the Barnett, but that was in an urban setting and necessary to get them all to go the same direction, and encourage drilling by not breaking it up within a subdivision or community).
And yes, I do work in the industry and am a landowner, so I talk from both sides – and recognize both sides. I also fall to the logic of getting it drilled – who can do it the quickest, not just who has the biggest wad when they hit my front door.
Judy,
Can you or another member tell me who the point of contact is for the Guernsey or Tuscarawas county groups? Which 2 townships in Tuscarawas are being offered?
The townships in Tuscarawas Co are Perry and Washington Twps offered $5100 and 20% royalties. Contact John Domanski by email: johnD@homelandnrg.com or go to their website: homelandnrg.com and get contact phone numbers there. Good Luck!
The final offer for Guernsey Co northern twps and 2 Tusc. Co. twps was $5100 with 20% royalties. The rest of Guernsey got $4850 and 20% royalties. I’m not sure they’ll take more acreage; it may depend on whether it is contiguous with what they already have. They did not take any more acreage at the lease meeting. I was disappointed that Homeland went with their old friends, Carizzo Oil. Carizzo will probably only drill a couple of wells to prove the oil, then flip the leases for a 10% share of royalties as in other areas. I’m assuming the lease is landowner friendly, while I’m told the Shell Oil lease is not so landowner friendly, but I haven’t been able to compare the two, so that’s hearsay.
If Carizzo doesn’t take your land, you might try Shell Oil. They’re not taking anything less than 30 acres, but will give out vouchers for smaller plots payable in 120 days, and for owners with less than an acre, they’ll put you on a wait list, to be included when they get that far. Go to Southeastern Equipment Co on E 40, 8:00-4:00, I think. Take copy of your deed, tax bill with parcel numbers, and photo ID. Info on it: 740-227-1551.
Is anyone aware of any recent leases in Noble Co and the terms? The most I’ve heard is from some small groups/individuals for $3800. Still way too low. I’m going next Thursday’s 6:00pm meeting (11/3) at Noble Co Fairgrounds Community Center. Des Wertheimer seems to be engaging a good amount of acreage which makes for good leverage.
Did you previously say: “This Thursday he is presenting a lease offer to his XXXX County landowners where he represents XXXX acres. I’ll let you know terms when I hear about them.” If so, what were terms for that deal? Was the same thing oabout deal said at the two different county meetings last week?
No lease offer was presented to XXXX County on Thursday. Just talk of a big deal by the next meeting, which is not even schedule. More talk while lawyer/landowner run groups are having actual closings with good bonus, royalty % and lease terms. Done re-living this ground hog day over and over.
Acreage gone to actual landowner/lawyer run groups with a set deadlines for provable results. The proof is in the pudding as someone once said.
The last I was told was $5800 from a Chesapeake deal in a few various counties from a group signing,which included carrol, ,mahoning,jefferson,harrison,belmont .
but Chesapeake sold part of their acres for $15,000 equivalant counting drilling commitments.The wet gas areas are the most valuable so far , Actually the EagleFord got $35,ooo per acre and 27.5% and the Barrnett got $30,000 and 25% as the production got betterin Texas . But we need a little more infrastructure to get the juices flowing too.
Mike, I think you’ve got an extra zero on the price paid per acre in Texas. The highest price paid in the Eagle Ford for an all out buyout of land was company – company (not company – landowner) from Marathon Oil, at around $18,000.
@mike, where exactly are the “wet” areas? i own a 100 acre farm in Mahoning County Ohio. The first lease I was offered over the summer was for $2500 an acre and 17% royalty. i’m worried that if i don’t sign i will miss out, but i also fear signing too low. any advice?
Here is a map, roughly showing the “wet” “dry” and “oily” areas of the Utica shale: http://www.uticashalenews.com/2011/08/01/maps/
thanks for the map. i’m definitely in the “wet gas” area. my uncle is a lawyer who also owns property out that way and just informed me yesterday that the offer is now up to $5200 an acre and 20% royalty. Any advice? Should I wait a few more months?
Last Friday I received a lease in the mail from a Pleasant View Management. I own 5 acres in southern Summit County. They are offering 2500/acre and 16% gross royalties. Any advice will be greatly appreciated. Thanks.
i stumbled onto this website,we are in southern jefferson county,we are being offered 5400 and 20%,haven’t signed yet although its a pretty good offer,i think?.hope this info helps someone.
Pleasant View Management don’t walk away, run!
Jack, why do you say “run” from PVM? I live in Summit Co. and they sent out leases to me and many of my neighbors. I have not signed yet, but am afraid that many people in my area already have. Would like to get more feedback on this company.
Go to http://gomarcellusshale.com and do a search on the site for Pleasant View and then read EVERY POST talking about them.
Then tell me if they are an actual driller (ie oil and gas producer), lease flipper or independant landman being paid a day rate by the actual oil and gas producer. If you cannot answer that question, you have no business signing their lease. If they claim they are a driller and/or that they represent a driller on a day rate, ask for names and phone numbers of the driller and then verify the information and their credentials directly with the driller. Next, have an oil and gas lawyer look at their lease and see if they are required to close the deal if your title search shows you own the oil and gas rights. Then ask yourself why you are dealing with them versus the actual driller. If you don’t like any of the answers you find during the above run, don’t walk away.
Does anybody know what leasing prices are in Ashtabula and Geauga counties? Also, any indications of prices paid in Mercer County, PA just across the eastern border of OH…Thanks
I’m from Ashtabula Co. They offered me $1,600. My husband wants to take it before things fall through, and they don’t want to come into our county. I want to find out more before I sign anything. I believe we will get more if we wait. It’s hard to know what to do or who to ask.
we own property in Perry Co. SE of lancaster, does anyone know if this area will be in the gas/oil lease zone in the near future……?
I’m in Ashtabula Co. I’ve been offered $1,600 acre. I think that is really low and hoping to see it go higher. My husband wants to jump at it, before something happens and we end up with nothing, but I want to know more before I sign anything. It’s hard to know what to do or who to ask… Any info is appreciated. Thanks
Claudia,
$1,600/acre is low. There are offers upwards of $2,400/acre in Ashtabula. I’d like to see it reach $3,500/acre before even considering a lease.
With all the international money being poured into this play, I would not worry about a lack of offers. Remember, once that lease is signed and the trucks roll in, your land as you know it will change.
Ashtabula farmers need to start forming Landowners Groups to increase negotiating power.
Claudia
thanks for the information. The trend seems to be going in the right direction.
Mike
That offer seems to be the same that I have heard for the area, but I have heard it was from a company called Utica Exploration. This company is tied into Wishgard, LLC.
It is more of a marketing agreement than a lease – I would say do not sign, and wait for someone who is actually a driller, or a legitimate land group. Even with the land groups, limit the amount of time you will have to wait. I just worked with a few in a PA county that had signed with a land group, and they had an 18 month commitment. We will not pay the money they are hoping for, but we can commit to a well, and although they wanted to work with us, they had previously committed to the landgroup and the group would not release them, even though our leases surround their property, and the remainign property in the area is HBP with other operators, and we are willing to commit to drilling completing and producing a well in 3 years, or pay commensurate commitment monies to what they would otherwise be offered.
Be picky to whom you commit.
Also, look at the value of a well, versus the value of the bonus payment, especially if the lease promises big monies, but a long waiting period before monies are due – this typically indicates they will sign you up, then shop for a buyer, an MAY pay you when they find a buyer for your lease. Remember, there will be a big push from thius “marketing type” right now before NAPE, which is an industry sales tool, and they will be trying to sale your lease at the show,but have never drilled a well, permitted a well, or bonded one, so all they are is a bunch of used car salesmen making a deal to make some money that in all likelihood will not get you a well.
I have done it also, but at least I work to get the wells in, and give people commitments for wells, if I can’t match the monies.
I spoke with a landman last week and he was offering 3250 per acre bonus and 17% royalties on gross production for property in western Mercer County PA. Currently have the lease under review by an attorney.
Law,
What have you found out from your attourney on the offer that was made to you?
Thanks.
Law,
Someone made me exactly the same offer today in Lawrence County, and I came to this site trying to figure out what to do next. Did you learn anything from your attorney? I know I’d need to get an attorney to look at my offer in case the details are different, but I’m trying to decide if it’s worth doing that.
We just signed for 5850.00 20% gross in columbiana county ohio through a lawyer group. Some things I learned during this journey is at this point if you go on your own get a consultant or go into a group. A consultant can really help protect what you feel is important but that lowers the price per acre. If you are open you should get 5400, if you have to have written in the contract no surface activity you should get 4000. If you are not looking for that wording than find the consultant since he was doing better for us than the landman on the phone. The landman said if we stay on our own he wouldn’t pay more than 4 grand but the consultant found 5400. Big difference. Some consultants do not take royalties while some do. The one I was working with did not. The consultant wanted 5% of the bonus money and the lawyer took 2.47 %. From the day I called the lawyer it took less than 2 weeks to sign and notorized.
Another thing I was told and learned is if you ever received a call or letter they want your property so use that to get more.
Hi Tango,
I am a financial advisor with Morgan Stanley Smith Barney. I currently have a few clients in your area who I am trying to provide the best expertise for. Can you please tell me what attorney you used so i can set up a meeting with them? I greatly appreciate the help and hopefully can repay the favor in the future to you.
Jay
If you want contact me at crzyhorse5@yahoo.com. I’m not 100% comfortable posting that without asking
Thank you all for price updates in Ashtabula and Mercer County..Seems like prices remain firm. I would appreciate any further updates from others.
Thanks
I am a landman with extensive experience in the marcellus shale. Would be happy to answer lease questions and provide a copy of an excellent blank lease as an example. Don’t sign anything till all of your questions are answered.
Dan I have 45 acres in summit county,oh , i have been approached by pleasant view management for a non surface lease @ $2500/acre 16% royalties. company seems fishy to me price seems low. surrounding landowners with me have about 500+ acres, some have signed, if u have any advise or lease help i would appreciate it or if you could point me in right direction thank you for your time Eric Beddow ekb92102@yahoo.com 330-620-8643
Dan: I have 650+ acres in Wayne county and 160 acres within the city of Parma, all with producing Clinton oil and gas wells. Have been approached by Lario and MFC. What can you tell me about activity in Plain Twp., Wayne County,Ohio?
Hello, Glenn. I think the first thing that you need to do is determine if your property is available to lease. Do you own the oil and gas rights? You said that there are existing oil and gas wells on the acreages. This usually means that the properties are “Held by Production”. If you are receiving royalties or rental payments for those wells, this is probably the case. Many landowners in PA thought that their properties were available, only to find out they were already under lease. You have large acreages worth alot of money and you need to find that out. I will be glad to help if I can. flemdan1@yahoo.com
I own 600 acres in columbia station / lorain county in the utica “oil” area and I own the mineral rights. I would like to lease, but not sure who is interested. I get letters offering $1000/acre lease + 15% seems to cheap.
Has anyone heard about lease agreements in Summit County?
I believe the muskingum valley landowners group has around 8000 acres in perry county,might be something to look into.
got a meating on tuesday with chesapeak energy im in portage county right by stark county and there offering 1600 a acre and i got 6 acres and there gonna be drilling in the hay field about a football field away from my house they already paved the road that leads up to the field should i ask for more since i know they will be drilling for sure or wut any advise would be awsome and soon thnx
first go to the odnr website and check out the maps of wells. You will find out that they only drill northwest and southeast from the well. That should help you some. There is a well going in within site of my house in carroll county, but I wont get anything from it. It is northeast of my land.
Does anyone know how much crude can be extracted from a volume, say…a cubic yard of Utica shale……………Thanks
I would really like to know more about lease pricing in Trumbull county – east of Cortland, OH near the PA line. We were sent a letter just a few days ago (Feb 2012) offering $3,000 per acre but it seems low after reading other people’s postings.
Try this site http://www.gomarcellusshale.com In the forums there is county groups you can join easily and other topics that discuss most of the counties in the oil/gas play. For tons of info concerning many areas this is the best site I’ve found since early fall. I do have to say though a few members are bullies and very political but you will figure out whos who really quick. Just ignore them. I wish you the best.
Thank you!
I have mineral rights in Northeastern Washington County and Southwestern Monroe County. Does anyone know what the Bonus rate should be for the Utica in this area and royalty percentage?
What companies are leasing in this area?
I have mineral rights in Northeastern Washington County and Southwestern Monroe County.
Does anyone know if their landowners group that includes this area and how to contact them or their website address?
John,
Atty John Wells handles several landowner groups in Washington, Morgan and others. He is the ex-mayor of McConnesville and quite reputable. I am not promoting him, just passing on info…he is in the book or, or course, google
I have mineral rights in Northcentral Washington County and Southwestern Monroe County.
Does anyone know what bonus rate per acre that is being paid in this area?
I live in Hocking county. I was just offered $300 an acre, with $100/acre upfront, $50/acre for 4yrs after w/ 12.5% royalties. I just recieved this letter. Does this seem to be the starting $ amount?
Thank you for your reply.
In Washington county the offers are $500 to $1000 per acre, 5 yrs, 15%. In Monroe the offers are $1000 to $4000 per acre based on what I have heard.
Hocking county is 50-100 miles west of Washington an Monroe. I don’t know anything about the offers in that area. Hopefully someone closer to your area can reply.
Has anyone leased with Petroleum Development Corporation and know what Bonus Rate per acre their paying and what royalty percentage they pay (Net or Gross)?
Anybody know what the current per acre bonus and royalties are for Columbiana County? Specifically, West Township?
To answer your question most, most gas and oil leases in your area are starting at $4,800 dollars per acre with a minimum of 20 acres, royalties are around 18%. If you would like a quote on your property free of charge you can contact me at 412-377-1948. I work as a field rep for tri state advisors. We have recently purchased close to 2500 acres in your area. Hope the info helps.
Has anybody heard of landman with Mason dixon – mahoning cty reps for Chesapeake?
Has anyone been paid less money from Wishgard in Ashtabula County?
Yes, we did get the bonus pay as per contract and everything was written on the lease, as agreed. I had no problems with wishgard, and funny i even had a local atty. advise me ,will you really see the money? So just the same u can not even trust the atty’s. out there, for they are also making a bundle on filing things etc.and many are working directly with the Oil companys which u don’t have a clue unless u ask them,, as I did. Be smart,,:)
This should have been
“Has anyone been paid lease money from
Wishgard in Ashtabula County?”
can anyone explain the advantage or disadvantage of joining a landowners group.
also is there any interest in windsor township,
morgan co.
bo
I am in northeastern wayne county ohio. Specificaly Chippewa Twp. Is there any leasing inerest at this time in this area. If so which companies are showing interest and how much are they offering? Thanks!
I know of a lease for 4200 next to me. Dose anyone have a list of current co. offering leases in Monroe co.
We originally owned 120 acres and then the interstate took 50 acres. Who officially owns these acres and the mineral rights.
In Ohio, and PA, I do not have a definitive answer, unless, when the Interstate went through, you reserved the minerals unto yourself, then you would own them. In OK, TX and numerous other states, if the minerals were not reserved, then after the purchase, when the highway was completed, the maintenance, regulation and income were ceded to the states. Thus, if the OGM’s were not reserved by the seller in the sale, then the state government has oversight on those. Typically, if it is a subdivision road, and it was dedicated to the public, then the nearest landowner would receive the royalties for such – like a split down the middle of the street to the homeowners on opposits sides – As far as state and township roads, that question would somewhat be deteremined based on the original documents where the road was dedicated/sodl tot he state/township. On some roads, the Twp. has jurisdiction over state roads, and the township would likely recive the royalties and give sign the lease (it is not normally a lease, this typically happens when a well is designated to go under a road, the authority over the road is notified, permission is asked and granted, with no monies, except the royalties changing hands (for that portion of the roadway that pertains to the overall Unit size, or the pool, if multiple wells in a Unit). Some of this is regulated by certain states, and I am not familiar with OH.
i was told the prices in columbiana county have went down drastically. Does anyone know if this is true?
Does anyone know what the current prices are in columbiana county? I heard it was 5800 an acre but has since dropped.
One thing I know going on that’s not on the news is private consultants packaging some acreage together and submitting it directly to Chesapeake.
Right now my neighbors is in with one and it’s been a few weeks since the packet was sent so we still don’t have word if Chesapeake picked up the lease yet. We know do to a water test notice with a named well on those papers and a call to the oil co. that this neighbors land is included in a unit but again he’s not leased yet so I’m assuming they plan on agreeing to the terms which offer the higher bonus and gross royalties. The person who posted above is most likely a private consultant and will most likely charge a % of the bonus payment. Some will also ask for a royalty percentage (I would never agree to that). If they get you the better landowner friendly terms and a great bonus than they are worth the 3-5%. This is similar to cherry picking but reversed. The consultant may know if your area is almost fully signed and knows the oil co wants you so they take your land and add just a few others to push them all through but it’s all small potatoes to the oil co. since they aren’t committing to a huge group with land they will either never drill on or need to swap later to another oil co. If this deal goes through for my neighbor I will post the consultants info with permission of course to try and help others. Remember almost any consultant or land group needs to hold you for a time frame so they have a chance to sell your lease. This doesnt take just a few days. I know this consultant wants to hold the landowner for a total of 5 months. The huge land groups sometimes want a year or more commitment from the landowner.
Just remember you might be leasing your land for 30-40 years so a few months shouldn’t worry anyone unless you are sure a good offer somewhere else is close to becoming available for you.
If DPS penn or mason Dixon knocks on your door right now the leases are awful in so many ways but if they are knocking and calling remember that means they want or need your land. If they knock and call daily I wouldn’t be surprised to find out your land is already in a proposed drilling unit that wouldn’t even need to be sent to ODNR for 8 or 9 months but they know how they want this unit to be and a lot of their time and resources have already been devoted to it. If this is happening to anyone now find a consultant and do not sign that terrible lease with DPS Penn or Mason Dixon since you just might have the upper hand. Remember landman lie also all the time.
Land owners in Warren County Pa have recently been approached for leasing the rights to the Utica by Rex Energy. On my road landowners were recently offered 1500 per acre and 15 percent royalties. None of us belong to a landowners group and the majority of us own 20 to 80 acres. Should we try to start a group? We are still early in the ball game here in Warren county Pa and are not sure about the best way to go about getting a landowners group together. Any advice from knowledgeable Ohio residents would be greatly appreciated. Thanks
I think you should try. IMO you would not be risking a lower amount since there’s almost no other way to go but up. I’m going to assume that 15% is net. Gross is what you want and is more important than the bonus cash IMO.
Andy-
Tango gives good information, however, I would go one step further.
The large landowner groups, in my opinion, are difficult to make effective in an area like Warren County, for, depending on where your property is located in Warren, there is a great deal of HBP land. In such cases, it may be better to work with likeminded contiguous neighbors and look for a company that is working on a drilling plan.
A smaller, nimble group of neighbors might be able to get,not only good bonus, but also, being able to move together more quickly, a shorter windo to drilling.
As Andy put it, and I agree, the upfront bonus is not something to get tunnel vision on. It all works together, but in the end, someone with a plan to get it drilled is more beneficial than someone just tryign to tie up land to book to their reserves and sell stock from an SEC report.
Warren county has a lot of mineral severances and old HBP properties thta people do not know of, for the minerals were either severed in an old deed, or when the land was sold/purchased, the new owners did not notify the company that had the lease, so they never received payment, and they though they were open to lease with someone new, and found that they were HBP by an old well that they had never received royalties on for, in some cases, ten years or more. I have two acquaintances in the same boat right now.
As well, I work with some people in the industry and if you can figure out how to e-mail me from this site, I might be able to help you with some other insight.
I have four wells in North Jackson, Ohio where the UTICA rich oil is and also shale gas. Who should I contact and How do I contact them? Thanks much!
Does anyone know if in these cotracts being signed if the royalty is payed after they take out all the production cost or on the gross the at the point of sales, also is there an Ad Varloem tax to be payed by the landowner?
HELLO,TRYING TO FIND OUT IF THERE ARE ANY LEASE SIGNING MEETINGS IN TRUMBULL COUNTY, THANK YOU
We own 112 acres of land in central Pike County. Does anyone know of any interest by energy companies in the land in that area? Does anyone know if any landowner groups have formed in that county?
We were jusst offered 3200 an acre in Killbuck Ohio with Wishguard any comments to me 17% royalties