anyone lease their oil n gas rights in Pa?

FreightTrain · #1 04/17/08, 06:07 PM

in my area, i understand we sit atop the largest deposit of Marcellus Shale in the USA.... there is an oil and gas boom and some 20+ companies are clammering to lease the mineral rights. In 3 months it went from 150-200 an acre to 2000. A company from Texas just drilled the first well 3000 feet from the rear of my property and we have a pipeline just over the hill about a 1;4 mile away. The company is conducting a geo0seizemic study in 2 months (running listening devices in all directions and setting off underground explosions) to better determine what is down there.

just wondering what to look out for when signing a lease and should we hire a lawyer? we are looking at quite a large sum of money with potential for a nice monthly check from the volume they extract. Anyone making anything monthly from royaltys??

seedspreader · #2 04/17/08, 06:53 PM

Quote:

Originally Posted by FreightTrain

in my area, i understand we sit atop the largest deposit of Marcellus Shale in the USA.... there is an oil and gas boom and some 20+ companies are clammering to lease the mineral rights. In 3 months it went from 150-200 an acre to 2000. A company from Texas just drilled the first well 3000 feet from the rear of my property and we have a pipeline just over the hill about a 1;4 mile away. The company is conducting a geo0seizemic study in 2 months (running listening devices in all directions and setting off underground explosions) to better determine what is down there.

just wondering what to look out for when signing a lease and should we hire a lawyer? we are looking at quite a large sum of money with potential for a nice monthly check from the volume they extract. Anyone making anything monthly from royaltys??

Not sure how much land you have or how bad they want it but don't settle for normal residential usage, try to get 100,000 or 200,000 cf a year if you can (for future commercial endeavors at your farm).

bloogrssgrl · #3 04/17/08, 07:28 PM

Yes get an attorney, preferably on familiar with PA mineral rights laws and leases. Good luck. It sounds like you stand to make a pretty penny.

Wendell Holland · #4 04/18/08, 08:54 AM

Would like an opportunity to discuss your oil & gas lease before you sign anything. May be able to do you better.
RuthvenRoyalties@cox.net

foxpawz · #5 04/18/08, 12:58 PM

We had a phone call from a company in Pa. We own the mineral rights to a farm in Potter County. The caller was to send a contract for our perusal offering $10. per acre per year. Not worth the effort. At any rate the contract never came and we have not heard from them since. I didn't catch the name of the company so don't know if it was legitimate or not. Too bad as we could sure use the money.

FreightTrain · #6 04/18/08, 06:39 PM

i co own 20 acres with a friend... we purchased it for our retirement and its paid for. Since its co owned, I think we are going to incorporate first then sign a lease before the geoseismic tests in June.. that way at least we can grab a hand full of cash if the well is dead dry. its too much money to risk losing.. so right off the bat our company will show a profit (i think we must show profit in 5 yrs?) then the company can build as needed.... sewage, well, office, etc

while out shopping, we just heard the going price is now 2200.00 an acre for a lease.. dunno if thats 3, 5 or 10 years tho

opinions?

Triffin · #7 04/18/08, 06:57 PM

I would hire a local lawyer or you could call
a lawyer in an oil/gas producing state ..
Try Oklahoma ...and get the terms of a
standard land deal .. At a minimum you should get
so much per acre plus a participation in the
production assuming they hit something ..
Waste of time asking here .. JMHO ..

You only get to do this once, so do it right ..

Triff ..

tamsam · #8 04/18/08, 07:30 PM

Hope you don't care what your land looks like or what they tear up after you lease them the rights. Here we land owners have little or no say as to what they do after the lease is signed. Good luck with your land. Sam

Alice In TX/MO · #9 04/18/08, 08:37 PM

You DO have rights as landowner IF they are stated in the lease. You can state where roads go, restoration, fencing, etc. Hubby's a consulting petroleum engineer, and we've also leased our acreage, so we have experience from both sides.

You need to get a lawyer who knows oil and gas leasing. Also, all the neighbors may be in a "pool" to negotiate a better price. Do some asking around. We used an experienced lawyer, even though hubby is in the business. There's just so much you need to know!

I don't know the poster with one post who offered you a deal, but ... well, most people who just broker deals (not a specific company with plans to explore and develop) don't give a flying rat's fanny about the long run. They just sell packages.

That may, of course, not be the case here, but I had to mention it.

Down here, where they are exploring/developing oil and gas, I'd tell you not to EVER count production money as part of the plan. For oil and gas, 90% of the wells are dry holes. Shale is out of my experience, but caution is the best plan.

If and when you do get a check, treat every one as if it's the last. Do not spend, expecting another. Invest, save, and be wise.

tamsam · #10 04/18/08, 08:59 PM

Maybe some one needs to come to WV and tell the oil and gas people that. I just had a heck of a time getting them to fix our drive way where the tore it up and they weren't even drilling on our land. We are having meeting here trying to get laws passed that will protect our rights as land owners. I own what is on top of the ground and I should have a say as to which trees the cut and where they can go poo and leave the wipers and such. They did walk past a potter potty and come 50 ft onto our place and do just that. When it rains here it gets muddy and they track it on the roads and well how often do you want to wash your car, every time you leave your drive way? I have been to Texas and saw drilling rigs set up but they are like in another world compared to here. In the last 6 months there has been at least 6 different drilling companies putting in mostly gas wells her in our area. Sam

Alice In TX/MO · #11 04/18/08, 09:05 PM

In Texas, the Railroad Commission has regulated how drilling and production locations have been handled for a long time. There are strict pollution controls, even down to water disposal and the above-mentioned port-a-potty.

My hubby's a stickler for doing things right, and it's why landowners like him, even though he works for the exploration/development people.

Alice In TX/MO · #12 04/18/08, 09:17 PM

Interesting article about your shale formation and how to produce it:
http://www.stargazette.com/apps/pbcs.../1001/ARCHIVES

and another:
http://www.iht.com/articles/2008/04/08/business/gas.php

Hubby is on a horizontal drilling operation in East Texas at the moment. It is a very difficult process. You drill straight down into (or just above) the target geological formation, then put in a downhole motor which gradually "builds curve" and the hole gradually changes direction from vertical to horizontal starting at that point. Yes, they are putting a gentle bend in steel drill pipe, which is kind of hard to imagine. When the hole is completed and production equipment is installed, this one well has the potential to produce as much as six normal vertical holes.

The risks are great because of sticking, collapsed holes, tool failure, etc. Personally, even though I've been married to the oilfield for 32 years, I still find it amazing that they can work miles below ground and have an inkling as to what's going on!

anniew · #13 04/19/08, 09:19 AM

Abe,
There are a couple of posts on the proboard...please read...
Also, leases that are filed with deeds are public information...some are just filing memos of underestanding now, so the full lease isn't public.
However, there have been many workshops about leasing...there is another one in Susq. Co. next Wed. if you are interested...a tax man, a financial planner and an attorney is speaking.
There also was one in Tunkhannock last week, and there is one scheduled in Honesdale shortly, but don't know when.
You need not only a local attorney, but one who knows about gas leasing laws.
There are things that need to be put into addendums and/or into a lease you present to them rather than using their boiler plate lease.
Ann

FreightTrain · #14 04/21/08, 07:22 AM

thanks everyone,
i just found out about and attended a local landowners meeting in LeRaysville last evening, found out a ton of information... we are trying to get in with another group to increase our numbers... the oil man advised us to be in no hurry to sign and that we might be the last to sit at the table but we are bringing the main course! said we are sitting on the mother lode of Marcellus shale...

gonna be a nice way for me and my "..bride to be" to start building our cabin and dreams..