Gas Lease Frenzy NE PA

[ancientlake]

I know there have been previous threads on gas leases, but in my area of northeast pa, it has become a feeding frenzy. It used to be a $50/acre 12% royalty proposition. Now offers are coming in in excess of $2,000/acre and 18%. Leases are also being crafted that better look after the land owner in other regards. Curious to know what other people are doing/thinking. I'm considering signing a $2,100/acre, 18% royalty 5-year lease that is now being offered by North Coast.
Chris

 

[Wayne County Hose]

Whoa, that's better than anything I heard of an hour east of you. I'm told the current offer is around $1500 an acre and 12% royalty. Is North Coast a driller or an agent?

 

[ancientlake]

I could be wrong, but my understanding is that North Coast is a smaller, aggressive driller. $2,100 is a relatively new number. Already hearing rumors of higher numbers, but this whole process is drowning in rumour and gossip, much of it false.

 

[Wayne County Hose]

You are so correct. There are many big landowners around here. You will here today that they got $1500 an acre. Ask them tomorrow, they say no, they haven't signed yet. One really doesn't know what to believe.

 

[Unclebuck257]

Just be very careful fellows regarding all aspects of signing a lease, beyond the initial money stars in your eyes. Things such as gas pipelines across your properties, injection wells (how many and what kind), restoration of properties after drilling (every detail) and EVERYTHING else you want covered and may not have thought about like new roads, fencing, truck right of ways, can they remove trees to drill, can they drill anywhere on your property they want to or will you have some input into that part too, etc.

I'd suggest you read BOTH the articles listed below as a start. The older article, "What Lies Beneath" is linked through a link in this new article too.

War of the Wells by Rusty Middleton - The Texas Observer

 

[ancientlake]

Thank you Uncle Buck. Wise words, andI will read those articles...

 

[dgl24087]

I have a lease copy in hand offering $5 per acre, 12.5 % royalty.

 

[chetorba]

There was an article in the NY Times on Tuesday about gas leases in NE PA you should read. They mentioned leases of $2,100 per acre.

 

[chetorba]

Forget to post the website

http://www.nytimes.com/2008/04/08/business/08gas.html?_r=1&st=cse&sq=gas+lease&scp=1&oref=slogin

 

[MuncyBob]

Just an update from Central PA.
After speaking with a neighbor I called their "landman" and an offer came to us for $1500/acre, $3000 for each well drilled and cannot be drilled within 200 ft of any structure, 15% royalty minus "operating expenses", $5/acre/yr for shut in well and will install pipeline unerground if land is being cultivated.

I then went to another agent locally and got $2150/acre, $3k for each well, 16% royalty and no expenses, all pipeline is 4' underground and would be double trench(topsoil preservation), $25/acre/yr for shut in well and cannot drill within 300' and well location is to be mutually agreed upon.

Just goes to show what different offers are out there. We have a very curious situation though. Our 9 acres is entirely landlocked by 1 owner(our land is in the middle of a tree farm) and we heard that the tree farm title may have a "cloud" on it and it's not likely any gas outfit will want to drill there. If that's the case I wonder why any drilling would take place on our land since minderal/gas rights may not be available on the tree farm?