Lease & Royalty Payments

Lease & Royalty Payments | McKean County | Pennsylvania | Potter County | Tioga County (PA)

Leasing Activity Picks Up in Northern PA – for Utica!
November 7, 2014November 7, 2014

One of the most-drilled Marcellus Shale counties in Pennsylvania has been Tioga County–just about dead center (horizontally) and at the top (vertically) of the state, sharing a boarder with New York State. Four to five years ago there was a leasing frenzy in Tioga and Potter counties, followed by a lot of drilling in Tioga and a little bit of drilling in Potter. Leasing activity all but stopped–then something really interesting happened. Recently Shell reported drilling 6 Utica Shale wells in Tioga County, the first two of which have turned in truly impressive production rates (see Shell Drills 2 Successful Utica Wells in NEPA Marcellusland). Apparently because of Shell’s success, leasing activity in Tioga and Potter (and even in McKean County) has once again picked up the pace–this time for leases to drill Utica wells…
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Anti-Drilling/Fossil Fuel | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Washington County

Washington County Votes to Establish “Ring of Fire” at Mingo Park
November 7, 2014November 7, 2014

Two days ago MDN told you that Range Resources is the winner of a contract to drill under (not on) Mingo Creek County Park in Nottingham Township in Washington County, PA (see Range Resources Wins Contract to Drill Under Mingo Creek Park). Precisely 2 (out of 207,820) Washington County residents turned up Thursday night to ask county commissioners to delay their impending vote to move forward with the lease. Certainly nothing out of the ordinary about that–except that the language used by those who oppose drilling (and fossil fuels) never ceases to surprise and amuse us. They intentionally attempt to conjure up images of environmental disaster and holocaust, even though there is no evidence to support their claims. For example, one of the two last night told commissioners by drilling under the park from land adjacent to the park it will create “a ring of fire” around the park. Of course, we immediately thought of Johnny Cash…
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Energy Companies | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Washington County

Range Resources Wins Contract to Drill Under Mingo Creek Park
November 6, 2014November 6, 2014

Range Resources has won the right to drill under (not on) the Mingo Creek County Park in Nottingham Township in Washington County, PA. We told you back in December that county commissioners were soliciting proposals to drill under the county park (see Washington County Seeks Proposals to Drill Under Mingo Creek Park). In the end, Range Resources, Rice Energy and EQT were all interested–but it was Range’s terms of a $6,500 per acre signing bonus with 18% royalties that won the day…
Read More “Range Resources Wins Contract to Drill Under Mingo Creek Park”
Lease & Royalty Payments | Ohio | Utica Shale | Washington County (OH)

Marietta’s City-Owned Land for Lease Tied Up (Again) by City Council
October 27, 2014October 27, 2014

For (quite) a while now the city of Marietta, OH has tried to get leases of city-owned property for drilling under (not on) to extract Utica Shale gas. The first time around they tried, they delayed and it cost them (see Delay in Leasing City-Owned Land Costs Marietta, OH Big $). They decided to try again, with five different parcels (see Marietta Tries 2nd Time to Lease City Land for Utica Drilling). MNW Energy, a leasing company for Protege Energy, originally offered to lease Gunlock Park and Goose Run Road (two of the five parcels) for $4,750 per acre signing bonus and 17.5% royalties. Looks like that deal is back on the table and the city is reviewing it–hopefully in a more timely manner this time around. The problem is, it appears city council is once again frittering around…
Read More “Marietta’s City-Owned Land for Lease Tied Up (Again) by City Council”
Energy Companies | Lease & Royalty Payments | Shore Exploration & Production | Statewide VA | Virginia

What Were Landowners in Central VA Paid for a Lease Bonus?
October 24, 2014October 24, 2014

We consider Virginia “northeast” as far as coverage goes on MDN. While the Marcellus skirts the very edge of the state and there’s very little Marcellus that would like ever get drilled in Virginia, there are other shale basins in the state, one of which is the Taylorsville Basin–south and east of Fredericksburg, VA. MDN told you in April that Shore Exploration has leased 84,000 acres in the Taylorsville Basin (see Virginia Inches Closer to Shale Drilling in Taylorsville Basin). We now know what they paid per acre for those leases (hint: not very much by Marcellus/Utica standards)…
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Chesapeake Energy | Energy Companies | Lease & Royalty Payments | Pennsylvania | Southwestern Energy | Statewide WV | Washington County | West Virginia

Chesapeake Sells Close to 25% of Marcellus/Utica Operation
October 16, 2014October 16, 2014

The Chesapeake Energy fire sale continues–and this time it’s cut right into the bone and sinew of the company. The beneficiary of Chesapeake’s ongoing divestiture, this time, is Southwestern Energy. Southwestern has signed a deal to pick up 413,000 (!) Marcellus/Utica acres, most of it in West Virginia with some of it in Washington County, PA. Much of the land is in prime wet gas areas (see the map below). The deal includes 256 (!) operating and producing Marcellus and Utica Shale wells and another 179 (!) non-operated, non-producing wells–a total of 435 drilled wells. Southwestern is paying Chesapeake $5.375 BILLION for the deal–which will make Chesapeake’s real boss, corporate raider Carl Icahn, very happy…
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Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA | Susquehanna County

Important Landowner/Driller Case Heads to PA Supreme Court
October 13, 2014October 13, 2014

A Pennsylvania landowner signed a lease with Cabot Oil & Gas in 2007. Part of the way through the lease, before Cabot initiated drilling, the landowner sued Cabot to dissolve the lease, citing certain reasons that they believe justified that action. The case went to court and the court eventually threw out the landowner’s case, meaning the lease is still in effect. Cabot then filed a counterclaim to have the lease term extended, something called an “equitable extension of lease terms.” In other words, once sued, the lease term should go on pause, and because they won, Cabot should then be able to un-pause the lease term and continue (which would otherwise have expired due to the long time it takes for court cases to play out). The court did not grant Cabot’s request and the case has now been appealed all the way to the PA Supreme Court. The decision will set an important precedent for both landowners and drillers…
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CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Lease & Royalty Payments | Maryland | Statewide MD

Will Cove Point LNG Plant Goose Royalties for Landowners?
October 13, 2014October 13, 2014

With the final recent approval for Dominion’s Cove Point, Maryland LNG export facility, the plant should go online sometime in 2017 (see Dominion Gets Final Fed Approval to Build Cove Point LNG Plant). Question: Will that one, single plant sop up enough Marcellus (and Utica) methane to raise the price of shale gas in the northeast and correspondingly raise the amount of royalties received by landowners? According to the executive director of the West Virginia Oil and Natural Gas Association, that answer would be “yes”…
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Energy Companies | Equinor/Statoil | Gastar Exploration | Lease & Royalty Payments | Noble Energy | Statewide WV | Triad Hunter | West Virginia

Details on 4 Bids to Drill Under Ohio River in WV
October 6, 2014October 6, 2014

As MDN recently reported, West Virginia solicited bids from drillers to drill under portions of the Ohio River in areas where the state owns land adjacent to the river and in areas where there is Marcellus and/or Utica Shale present. The state received four bids (see WV Receives 4 Bids to Drill Under the Ohio River). What we now have are the details of those bids…
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Dominion Energy | Energy Services | Harrison County | Industrywide Issues | Lease & Royalty Payments | Ohio | Pipelines

Harrison County Landowers Say Dominion Pipeline Offer is Too Low
October 6, 2014October 8, 2014

Dominion wants to widen an existing right-of-way to build a 16.5 mile natural gas pipeline in Harrison County, OH. But according to landowners under whose property the pipeline would sit, Dominion is low-balling them–offering, literally pennies on the dollar. How much is the offer, and what’s the going rate to lease land for a 36″ pipeline in that area of Ohio?…
Read More “Harrison County Landowers Say Dominion Pipeline Offer is Too Low”
Beck Energy | Belmont County | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Monroe County | Ohio | XTO

Major OH Court Victory for Beck Energy & XTO in Lease Case
October 1, 2014October 3, 2014

A court case with big implications for all Ohio landowners–and drillers–was decided in March 2013. In Hupp v. Beck Energy Corp, three landowners filed suit claiming that their leases with Beck Energy Corp. were void and should be terminated because Beck never drilled wells on their property and that a provision allowing Beck to pay a nominal delay fee was against public policy. The court agreed and granted summary judgment (see OH Lawsuit Victory: 600-700 Landowners Can Terminate Beck, XTO Leases). Beck had sold the leases–in Monroe and Belmont counties–to XTO Energy, so XTO got involved in the lawsuit too. The court then granted class certification to the lawsuit brought by the three landowners–meaning between 600-700 landowners would also be able to invalidate their leases. A few weeks later both Beck and XTO filed an appeal (see XTO, Beck Energy Appeal OH Case Allowing Lease Termination). On appeal, this week the Seventh District Court of Appeals in Ohio overturned the lower court ruling and ruled in favor of Beck and XTO–a major victory for Ohio’s drillers and a major defeat for the landowners who say their land never got drilled and they wanted to re-sign with different company…
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Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

OH 7th Circuit Court of Appeals Decision on Dormant Minerals Act
October 1, 2014October 2, 2014

A few weeks ago MDN told you about the important court case before the Ohio Supreme Court concerning the 1989 and 2006 Ohio Dormant Minerals Act (see Video: OH Lawyers Explain Dormant Minerals Act & Impact on Utica). While the OH Supremes have not yet ruled, there was a ruling on the periphery of the DMA from the Seventh District Court of Appeals concerning the 1989 version of the DMA a few days after our post…
Read More “OH 7th Circuit Court of Appeals Decision on Dormant Minerals Act”
Economic Impact | Industrywide Issues | Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

MWCD Cuts Watershed Fee 50% Thanks to Utica Shale Revenue
September 30, 2014September 30, 2014

Here’s a good news story for millions of Ohio residents who are fortunate enough to live in the Muskingum Watershed. After some initial timidity, the board members of the Mukingum Watershed Conservancy District (MWCD), charged with managing 8,000 square miles of rivers, reservoirs and creeks that drain into the Muskingum River (covering 20% of the state), decided in 2012 to lease MWCD-owned land for Utica Shale drilling. Since that time they’ve received more than $175 million in signing bonuses. With royalties that eventually will come in, it’s not inconceivable that the MWCD will rake in over $1 billion in revenue from Utica lease activity. They’ve already committed to reinvesting $300 million over the next 10 years (see MWCD Reinvesting $300M of Utica Shale Revenue over Next 10 Yrs). The further good news for residents in the Watershed is that the fees they pay to the MWCD will go down–by 50%–starting next year. Thanks to the Utica Shale…
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Lease & Royalty Payments | Marshall County | Pleasants County | West Virginia | Wetzel County

WV Receives 4 Bids to Drill Under the Ohio River
September 29, 2014September 29, 2014

West Virginia doesn’t let any grass grow under their feet when it comes to the drilling industry. They are pro-drilling, by and large, and when they get an idea, they run with it. Latest example: Barely a month ago WV officials announced they will lease the land under portions of the Ohio River, to allow Marcellus/Utica drilling (see State of WV Looks to Lease Area Under Ohio River for Drilling). Last Friday they opened bids from four different drillers. Here’s what they found…
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Energy Companies | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Washington County

Range’s Unique Approach to Signing Small Landowners in WPA
September 23, 2014September 23, 2014

Typically villages and cities have not seen Marcellus or Utica Shale drilling under them because of the numbers. To negotiate leases with hundreds or even thousands of landowners over a relatively small area makes no sense when you have to pay landmen and have all of those leases individually vetted by a lawyer. Signing bonuses are piddly and royalty checks aren’t much either. So most drillers have passed by the small villages and towns that sit next to land they otherwise have leased. However, Range has hit on a unique approach. Range has enlisted the help of the Claysville Borough (Washington County, PA) fire department to approach and get residents in the borough to sign a single, standardized group lease–think landowner coalition lease…
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Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

Video: OH Lawyers Explain Dormant Minerals Act & Impact on Utica
September 19, 2014September 19, 2014

An issue MDN has not previously tackled (until now) that is coming to the fore in Ohio is “the Dormant Minerals Right Act” (DMA) in that state. In a nutshell, there are two DMAs in Ohio–one passed in 1989 that went into effect in 1992, and another in 2006 which added certain additional procedural requirements to the 1989 version. The DMA in its various versions provides for mineral rights that had previously been separated from surface rights to transfer to the surface owner under certain conditions. The problem–for drillers and for landowners in Ohio–is in knowing which set of DMA rules to use (1989 or 2006) in determining who owns the mineral rights. It’s a big problem when drillers are spending sometimes up to $10,000-$12,000 per acre in lease bonuses–to say nothing of where to send the royalty check. Some drillers are holding back on leasing because of this issue. A case now sits with the Ohio Supreme Court, Walker v Noon, that will sort out these important issues. The very sharp lawyers at Ohio law firm Bricker & Eckler have done a masterful job of explaining the case before the Supreme Court, a case brought by their firm…
Read More “Video: OH Lawyers Explain Dormant Minerals Act & Impact on Utica”