Lease & Royalty Payments

Lease & Royalty Payments | Pennsylvania | Statewide PA

DCNR Says PA May be Getting Shorted on Royalties for State Land
January 9, 2015January 9, 2015

Before he left office, Pennsylvania Democrat Gov. Ed Rendell leased all of the state-owned land he could for gas drilling before he hypocritically slapped a moratorium on any further such leasing for his Republican successor, Tom Corbett. Turns out old Ed is crazy like a fox. PA not only got whopping big money from signing bonuses that Ed used to plug big holes in his overspending budgets, but now the state regularly receives $10 million PER MONTH in royalty revenues from all of that leasing. Thanks Ed! Just one problem, according to the Dept. of Conservation and Natural Resources (DCNR)–the state may be getting shortchanged on some of their royalty payments. The DCNR won’t say who they think is doing the short-changing. They’re running a full blown review right now…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Lease & Royalty Payments | Pipelines | Tyler County | West Virginia

What’s a Fair Price for Running Pipelines Through Your Property?
January 5, 2015January 5, 2015

The landowners in Tyler County, WV who sit along the proposed route of Energy Transfer Partners 800-mile, $4.4 billion pipeline, called Rover, to connect the Marcellus/Utica region with the Midwest and Canada are asking for one thing: a fair price. According to one landowner, they’ve received an offer from ETP that’s about 1/3 of where it should be. Problem is, if landowners don’t accept ETP’s offer, once the Federal Energy Regulatory Commission (FERC) approves the pipeline, ETP can then use eminent domain to simply take the land it needs and pay the price it wants to pay. Landowners’ only recourse at that point is to ask a court to arbitrate a price. No, we’re not fans of eminent domain–it’s an imperfect concept for an imperfect situation in which some hold-out landowners remain unreasonable. But that doesn’t excuse lack of a fair price. So what price has been offered and what do landowners think is a fair price to receive?…
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Chevron | Energy Companies | Lease & Royalty Payments | Marshall County | West Virginia

Moundsville Leases Park Land for $5K/Acre, 18% Royalties
December 31, 2014December 31, 2014

Moundsville (Marshall County), WV recently signed a deal with Chevron that allows Chevron to drill under (not on) the municipal-owned Valley Fork Park. The deal leases the park’s 14.95 acres for $5,000 per acre plus 18% royalties when the gas begins to flow. Moundsville received $74,750 up front in lease bonus payments…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Chesapeake & PA Landowners Settle Royalty Lawsuit…Again
December 30, 2014December 30, 2014

In September 2013 MDN told you that Chesapeake Energy had “settled” a lawsuit that would reimburse Pennsylvania landowners for post-production costs Chesapeake had deducted from royalty checks, leaving some landowners with checks for pennies (see Chesapeake Settles PA Royalty Lawsuit for Pittance: $7.5M). As we said at the time, it was a pittance that Chessy would pay $7.5 million to be shared among “several thousand” landowners, with 1/3 of it going to lawyers. The suit was never settled because some landowners sued to block it while they filed their own, separate lawsuit. The disagreeing landowners have finally joined and have (now) accepted an offer from Chesapeake to settle–for $11 million. Still peanuts if you ask us, but perhaps something is better than nothing?…
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Chesapeake Energy | Energy Companies | Lease & Royalty Payments | Southwestern Energy | Statewide WV | West Virginia

Southwestern Paid Chesapeake $12K/Acre for Land Signed @ $5/Acre
December 29, 2014December 29, 2014

Last week MDN told you that Chesapeake Energy closed on a deal to sell some 413,000 Marcellus Shale acres, mostly in West Virginia (some in Pennsylvania) to Southwestern Energy (see Chesapeake Using $1B from Southwestern Deal to Buy Back Stock). The deal ended up being worth $4.975 billion, discounted from the original $5.375 billion because Southwestern agreed not to sue Chessy for “title defects” when and should that occur. As we said at the time, we’re not sure if a $400 million discount is a good deal or not in the case some of the titles to leases aren’t free and clear. But the bigger story, in our humble opinion, is this: Chesapeake picked up some of those leases that originally paid landowners as little as $5 per acre and as much as $5,000 per acre. They just turned around and sold those same leases for $12,000 an acre. That made corporate raider Carl Icahn, Geppetto pulling the strings at Chesapeake, really really happy…
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Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Research | Statewide PA

Online Tool Tracks PA Production by Well, Calculates Royalties
December 29, 2014December 29, 2014

Several times in the past, MDN has touted what we consider to be the best online database for Pennsylvania landowners interested in tracking the production of gas wells in the Keystone State. It’s called MarcellusGas.org and for $20 a year you can all the data you can handle with regard to how much a given Marcellus well is producing–based on the semi-annual reports filed with the state Dept. of Environmental Protection. MarcellusGas.org sports not only data on historical production, but a royalty calculator that projects out what a well may produce based on the production of other wells in the area that have produced longer. And according to landowners who have compared the projections with their royalty checks, they say it’s pretty darned accurate…
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Hydraulic Fracturing | Industrywide Issues | Lease & Royalty Payments | New York | Regulation | Statewide NY

In Light of NY Frack Ban, What Happens to Signed Leases?
December 19, 2014December 19, 2014

What happens to New York landowners who already signed leases with drilling companies, now that fracking has been banned by New York Gov. Cuomo? Will those leases expire? Could drillers decide to drill a vertical-only well?…
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Landowner Coalition News | Lease & Royalty Payments | Pennsylvania | Washington County

Go it Alone? Or Join a Landowner Coalition/Group?
December 16, 2014December 16, 2014

Not every landowner can belong to a group that negotiates a lease to allow Marcellus or Utica Shale drilling. In some areas (like PA, WV and OH), much of the large tracts of land is already leased. However, if you can belong to such a group, MDN believes it is in your best interests to do so. For example, take the experience of landowners in Washington County, PA…
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Energy Services | Industrywide Issues | Kinder Morgan | Lease & Royalty Payments | Pipelines | Tennessee Gas Pipeline

Skeptical MA Farmers Hear From/Talk To Kinder about TGP Expansion
December 5, 2014December 5, 2014

The Massachusetts Farm Bureau Federation is holding its annual two-day convention yesterday and today at the University of Massachusetts in Amherst. One of the talks yesterday was given by reps from Kinder Morgan, to talk about the proposed expansion of the Tennessee Gas Pipeline through (now) only part of Massachusetts. What can farmers expect if the Northeast Energy Direct (NED) project cuts across their land? Even though 90% of the pipeline will track with an existing power line right-of-way, how deep will the pipeline be buried? How much of a right-of-way will be required? What about trees? Those questions and more were addressed…
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Energy Companies | Gastar Exploration | Lease & Royalty Payments | Statewide WV | West Virginia

WV Looks to Lease More Ohio River, Other State Land for Drilling
December 3, 2014December 3, 2014

West Virginia is interested in leasing more under-the-water land (and under other state-owned land) for shale drilling. You may recall that Gastar recently had the winning bid to drill under 232 acres of the Ohio River as it flows through Marshall and Wetzel counties (see Gastar Wins Lease to Drill Under Ohio River in WV). WV is getting $3,500 per acre and a 20% royalty on gas produced from Gastar–a nifty $812,000 check just for signing the lease, money that goes into the coffers of the state. They like that money and they want more of it–and Gastar is interested in drilling under more WV-owned land…
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Antero Resources | Energy Companies | Lease & Royalty Payments | Noble Energy | Tyler County | West Virginia

Record High Bid to Drill Under Bambi’s Home in Tyler County, WV
November 25, 2014November 25, 2014

Looks like drilling and fracking adjacent to, and underneath, the Ohio River isn’t the only state-owned asset West Virginia has in mind to raise revenue (see Gastar Wins Lease to Drill Under Ohio River in WV). Last Friday, WV opened bids that will allow drilling under the 518-acre Conaway Run Wildlife Management Area in Tyler County, WV. Yes, those heartless monsters want to allow drilling and fracking under Bambi’s home–can you believe it?! The bids received will make your eyes pop out–some of the highest (perhaps THE highest) amounts offered in a signing bonus to date…
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Energy Companies | Greene County (PA) | Lease & Royalty Payments | Marshall County | Ohio County | Pennsylvania | Tug Hill Operating | Utica Shale | West Virginia

Still Time for WV/PA Landowners to Participate in $100M Deal
November 24, 2014November 24, 2014

Landowner coalitions are certainly not new. They began in the Marcellus region around seven years ago when landowners in Pennsylvania banded together to get rates and conditions more favorably than they otherwise could on their own. Smart idea. What is new is that landowners in West Virginia are now banding together because, although Marcellus drilling takes place in the state and much of that land has been leased, the Utica Shale that underlies the state is just now getting started. So landowners, like those in Marshall and Ohio counties (in the panhandle of WV) and Greene County (in southwest PA) are forming new groups to negotiate new leases for the Utica Shale. The Marshall/Ohio/Greene landowner group did just that, recently signing a $100 million deal (see Panhandle WV Landowners Broker $100M Deal with Tug Hill Operating). A few more details about the group and the deal…
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Energy Companies | Guest Post | Lease & Royalty Payments | Olympus/Huntley & Huntley

Guest Viewpoint: Best to Lease ALL Rock Layers at One Time
November 24, 2014November 24, 2014

Last week MDN told you about possibility that a rock layer some 20,000 feet below the surface may one day be an important player in natural gas and oil for the northeast (see Trenton-Black River: New Natgas Rock Layer in Your Future?). As part of that story, we wrote the following: “Landowners listen up. When you lease, ALWAYS specify the layer(s) in the lease that you will allow an energy company to drill. That way, in future years when yet other layers are “discovered” to have natural gas or oil deposits, you can re-lease for the new layer. Energy companies will understandably want to negotiate a lease for all layers. Landowners (and their lawyers) need to watch for and construct leases that favor the landowner. A word to the wise…” An MDN subscriber wrote us to take issue with that statement, to point out potential weaknesses in our argument. We are happy (with permission) to bring you the following guest post from Paul David Burke, VP & General Counsel for Huntley & Huntley, Inc…
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Chief Oil & Gas | Energy Companies | Lease & Royalty Payments | Marshall County | Ohio County | Tug Hill Operating | West Virginia

More Details on Tug Hill $100M Lease in WV Panhandle
November 13, 2014November 13, 2014

We have some more details about that lease deal for $100 million by Tug Hill Operating to lease land in Marshall and Ohio counties in the northern panhandle of West Virginia that we wrote about yesterday (see Panhandle WV Landowners Broker $100M Deal with Tug Hill Operating). We know a bit more about Tug Hill and the person behind it, and we now know that the $100M deal is with about 500 families (average of $200,000 signing bonus per family), and that it’s not too late for others to get in on the deal…
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Energy Companies | Lease & Royalty Payments | Marshall County | Ohio County | Tug Hill Operating | West Virginia

Panhandle WV Landowners Broker $100M Deal with Tug Hill Operating
November 12, 2014November 12, 2014

We have some information, but not a lot, on a recent deal to lease land in Marshall and Ohio counties in West Virginia. Tug Hill Operating, a small, privately owned exploration & production company headquartered in Fort Worth, TX, has just brokered a deal with the Marshall and Ohio County Landgroup. We don’t know how many acres are involved in the lease, nor how many families. What we do know is that the money Tug Hill is paying the landowners, collectively, is an eye-popping $100 million. We don’t have a copy of the lease, but we have little doubt that both Marcellus and Utica layers are part of the deal. Here’s what we do know about Tug Hill and the deal:
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Allegheny County | Butler County | Lease & Royalty Payments | Pennsylvania

East Allegheny, PA Leases School Property for Marcellus Drilling
November 11, 2014November 11, 2014

Earth to Mars (PA): To the anti-drilling parents in the Mars School District in Butler County, cast your eyes to the south in neighboring Allegheny County. The school district in East Allegheny, PA has just signed a lease with EQT to drill shale wells on district-owned property–in one case 500 feet away from the middle school! Now what was that about a well pad 3/4 of a mile from a Mars school–on non-school property–that has you so enraged? (see Rex Gets Permits to Drill Near Martian School, Antis Apoplectic) Back here on earth, the East Allegheny school board unanimously voted last night to lease 170.28 acres of district-owned land (in 14 parcels) to EQT. The terms are…
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