Lease & Royalty Payments

Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

PA Senate Reintroduces Two Marcellus Royalty Bills, SB 147 & 148
January 22, 2015January 22, 2015

The “funny business” of shorting royalty checks in Pennsylvania–particularly by Chesapeake Energy–may soon come to an end. A pair of bills that didn’t make it past the House last session have been re-introduced in the Senate and both have already passed the Senate Environmental Resources and Energy Committee unanimously. State Sen. Gene Yaw, Republican from northeast Pennsylvania, re-introduced Senate Bills (SB) 147 & 148. SB 147 allows landowners the right to review drilling company records to verify proper royalty payment. It also requires drillers to pay royalties within 90 days of production. SB 148 prohibits drillers from “retaliating” against a landowner who questions royalty payments by canceling the lease or stopping drilling activity. Both bills are embraced by the Pennsylvania chapter of the National Association of Royalty Owners (NARO)…
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Energy Companies | Lease & Royalty Payments | Marshall County | Noble Energy | West Virginia

WV Leases Another 1,400 Acres Under Ohio River for Drilling
January 21, 2015January 21, 2015

More drilling under the Ohio River is about to become reality. Last October, MDN told you about the deal to lease a 232-acre tract of land around and under the Ohio River in Marshall County, WV. The state leased the land for drilling to Gastar Exploration for $3,500 per acre plus a 20% royalty (see Gastar Wins Lease to Drill Under Ohio River in WV). That deal netted WV a tidy signing bonus check for $812,000, to say nothing of the royalties they’ll get once the gas starts to flow. WV liked that deal and decided to put more land under the river on the market (see WV Looks to Lease More Ohio River, Other State Land for Drilling). Yesterday the state confirmed they are close to finalizing a deal with Noble Energy to lease another 1,400 acres of state-owned land around and under the Ohio River–also in Marshall County. This new deal also nets the state $3,500 per acre, or $4.9 million, as a signing bonus…
Read More “WV Leases Another 1,400 Acres Under Ohio River for Drilling”
Belmont County | Energy Companies | Gulfport Energy | Lease & Royalty Payments | Ohio

Coal Company Leases 6K Acres for Natgas Drilling in Belmont, OH
January 20, 2015January 20, 2015

Murray Energy Corp. is a coal mining company headquartered in St. Clairsville (Belmont County) in eastern Ohio. In 2013, Murray’s CEO and founder, Robert Murray, sued Aubrey McClendon when McClendon named his new company American Energy Partners. Murray, you see, operates a subsidiary coal mining company called American Energy Corp. (see McClendon Gets Sued in OH Over New Company’s Name). We haven’t heard anything since that time, so presumably it’s all blown over by now. What’s interesting is that Murray, whom we assumed has a grudge against natural gas, has just leased 2,076 acres of his coal mining property owned by American Energy Corp., along with 3,849 acres from another Murray subsidiary mining operation, The Ohio Valley Coal Co., to Gulfport Energy so Gulfport can drill for natural gas under the coal mines…
Read More “Coal Company Leases 6K Acres for Natgas Drilling in Belmont, OH”
Industrywide Issues | Lease & Royalty Payments | Property Value | Supply Chain

Farmers National Opens Minerals Management Branch in Northeast
January 19, 2015January 19, 2015

Farmers National Company (FNC) calls itself the “largest independent mineral management firm” in the country. Started in 1929, the company works with landowners, farmers in particular, to turn their farms into profitable businesses. They also list and sell agricultural properties–one of the largest real estate firms in the country that do so. But it is their “mineral management” service that caught our eye. In a press release issued today, FNC announced they’ve expanded their mineral management services into Appalachia–Pennsylvania, West Virginia and Ohio (Marcellus/Utica country) to assist landowners with managing oil & gas leases and royalties…
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Antero Resources | Energy Companies | Lease & Royalty Payments | Monroe County | Ohio | Utica Shale

Antero Resources 4Q14: Just Paid $20K/Acre for More Utica Leases
January 16, 2015January 16, 2015

Antero Resources, one of the biggest Marcellus/Utica Shale drillers, issued their fourth quarter operations and hedging report on Wednesday. The report includes a lot of 2014 summary information. It’s an important update with a lot of juicy information contained in it. Perhaps the juiciest is buried near the end: Antero closed on a deal to pick up another 12,000 Utica acres, most of it located in Monroe County, OH, from an undisclosed third party. Antero paid an eye-popping $240 million–or $20,000 per acre! The land does have five producing shale wells and an 8-mile pipeline. Figure the wells are worth $8M each (the cost to drill them) and the pipeline is worth $1M per mile, another $8M (this is very rough, back of the envelope stuff). Deducting that from the price you still get $16,000 per acre for the undeveloped land. Yikes. Here’s the other things that caught our eye about the update…
Read More “Antero Resources 4Q14: Just Paid $20K/Acre for More Utica Leases”
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?…
Read More “Chesapeake & PA Landowners Settle Royalty Lawsuit…Again”
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…
Read More “Southwestern Paid Chesapeake $12K/Acre for Land Signed @ $5/Acre”
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?…
Read More “In Light of NY Frack Ban, What Happens to Signed Leases?”
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…
Read More “Skeptical MA Farmers Hear From/Talk To Kinder about TGP Expansion”
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…
Read More “WV Looks to Lease More Ohio River, Other State Land for Drilling”
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…
Read More “Record High Bid to Drill Under Bambi’s Home in Tyler County, WV”