Lease & Royalty Payments

Energy Companies | Halcon Resources | Industrywide Issues | Lease & Royalty Payments | Ohio | Pipelines | Trumbull County

Halcon Proposes 14-Mile Pipeline from Vienna to Lordstown, OH
December 11, 2013December 11, 2013

Halcon Resources has been pretty tightfisted when it comes to spending money on leases for drilling–and now, perhaps–for pipelines as well. More than a year ago MDN told you about a landowner group that had formed in the Lordstown, OH area that hoped to negotiate new leases. The landowners were bound under 20-50 year-old leases purchased by Halcon that never envisioned shale drilling. Halcon said they wanted to work with landowners but stopped short of agreeing to renegotiate the leases (see Halcon Resources Responds to Lordstown, OH Landowners Group).

Halcon not only drills wells, they also have a midstream (pipeline) division to connect them. Halcon even stores and ships oil and gas–they’re building a $70 million storage and railroad transloading facility in Lordstown (see Halcon Resources Plans $70M Oil Terminal in Lordstown, OH). As part of the new storage facility, Halcon wants to run a 14-mile pipeline from Vienna to Lordstown. The problem, according to some communities along the route, is that Halcon doesn’t want to pay all that much to install a permanent pipeline…
Read More “Halcon Proposes 14-Mile Pipeline from Vienna to Lordstown, OH”
Lease & Royalty Payments | Pennsylvania | Statewide PA | Statewide WV | West Virginia

Clear Fork Royalty Now Buying Royalty Rights in PA & WV
December 11, 2013December 11, 2013

There are companies that will purchase landowners’ royalty payments–giving them a lump sum payment in return for signing over all future royalty payments to the company (or individual) buying them. It’s not unlike companies that approach and pay lottery winners who receive payouts over a long period (for life, or for a period of years), the winners selling their future payments for a single lump sum now. Of course by selling future royalty payments for money now, the landowner will typically accept far less than they otherwise would have received by continuing to get the royalty checks over time. But there are certain circumstances (terminal illness, for example) when the landowner would rather have as much of their money as they can get–right now. And so royalty-purchasing companies exist to oblige.

One of those companies is Texas-based Clear Fork Royalty, who (by press release) has announced they’ve now hung their shingle in the Marcellus/Utica region–in PA and WV. If you’re a royalty owner, Clear Fork may come knocking on your door…
Read More “Clear Fork Royalty Now Buying Royalty Rights in PA & WV”
Belmont County | Lease & Royalty Payments | Ohio | Utica Shale

Utica Shale Lease May Pull OH Volunteer Fire Dept from Bankruptcy
December 10, 2013December 10, 2013

We’re not sure of the circumstances that led the Neffs (Belmont County), OH Volunteer Fire Department to go more than $1 million in the hole–but that’s where they are. The miracle that may lift them out of bankruptcy and put them back on firm financial footing is the Utica Shale. Specifically, the opportunity to lease fire department-owned land for Utica Shale drilling.

The interesting (to MDN) aspect of this story is the very generous terms Neffs VFD is getting for the lease of 56.4 acres…
Read More “Utica Shale Lease May Pull OH Volunteer Fire Dept from Bankruptcy”
Barbour County | CONSOL Energy | Energy Companies | Lease & Royalty Payments | Pennsylvania | Statewide WV | Washington County | West Virginia

CONSOL Buys 90K WV Marcellus/Upper Devonian Acres, Well Report
December 10, 2013December 10, 2013

CONSOL Energy issued a press release today updating their Marcellus Shale well results from wells drilled in Washington County, PA. In addition to PA, CONSOL owns leases for and is actively drilling in the West Virginia Marcellus area–most of it in the “wet gas” (natural gas liquids) area of the Marcellus. The update says they just completed their first pad in Barbour County, WV, a pad with six wells on it.

The big news in today’s announcement: CONSOL has just purchased another 90,000 acres of leases in WV–from Dominion Resources–for $190 million ($2,111 per acre). The deal will allow CONSOL to not only drill in the Marcellus layer, but also the Upper Devonian shale layer as well. CONSOL is one of the few drillers (so far) targeting the Upper Denonian (see MDN’s Upper Devonian category for stories about who else is targeting that layer)…
Read More “CONSOL Buys 90K WV Marcellus/Upper Devonian Acres, Well Report”
Belmont County | Energy Companies | Lease & Royalty Payments | Ohio | Rice Energy | Utica Shale

Belmont County, OH Waiting for $3M Lease Check from Rice Energy
December 10, 2013December 10, 2013

In early October MDN told you Rice Energy had cut a deal with Belmont County to pay the county a $7,500 per acre signing bonus, more than the $5,900 per acre it promised to private landowners in the area (see Rice Pays Belmont County Higher Signing Bonus than Landowners). The lower per acre no doubt rankled some landowners–but many of them already have their money. So far, the county does not.

When will Belmont County get its $3 million check from Rice Energy? Because they really need it…
Read More “Belmont County, OH Waiting for $3M Lease Check from Rice Energy”
Industrywide Issues | Lease & Royalty Payments | Litigation | Preston County | West Virginia

Developments in WV Lawsuit to Rescind $5/Acre Leases
December 4, 2013December 4, 2013

Way back in March MDN told you about a lawsuit filed by landowners in Preston County, WV. They sued Magnum Land Services and Belmont Resources LLC to have leases they were snookered into signing for as little as $5 per acres rescinded on the basis of fraud and a variety of other legal claims (see Update on WV Lawsuit to Rescind $5/Acre Leases). There’s been a major development in the case.

U.S. District Judge Irene Keeley has dismissed charges against 19 employees from Magnum and Belmont because the paperwork was not timely. She also dismissed half the counts brought by the landowners against the companies. Plus, we now have a date for a trial: October 2014. Justice delayed…
Read More “Developments in WV Lawsuit to Rescind $5/Acre Leases”
Belmont County | Lease & Royalty Payments | Monroe County | Noble County | Ohio | Utica Shale

OH’s Largest School District Gets $1M+ from Lease Bonuses
November 27, 2013November 27, 2013

Ohio’s largest school district (geographically speaking), the Switzerland of Ohio Local Schools in eastern Ohio, has raked in over $1 million so far from Marcellus/Utica Shale drilling deals. It’s located in some of the best drilling spots in the Ohio Utica (Monroe/Belmont/Noble counties). Even so, the school is headed for “devastating cuts” according to the school treasurer, due to a collapse in enrollment over the last 20 years.

The money received so far from shale deals is from lease payments, not royalties. Will the school district go on over the fiscal cliff? Or will shale royalties come along in time to save the day? School officials are not sure…
Read More “OH’s Largest School District Gets $1M+ from Lease Bonuses”
Lease & Royalty Payments

AAPL Seeks to Set the Record Straight on Role of Landmen
November 22, 2013January 16, 2014

Landmen, rightly or wrongly, sometimes have a bad reputation. Landmen fulfill an important role in signing landowners to leases to allow shale drilling on or under their property. The common perception (misperception) is that a landman swoops in to town and using equal parts carrot and stick, entices/cajoles/pressures dimwitted country bumpkin landowners into signing a lease they might not have otherwise signed (see MDN Goes to the ‘Promised Land’). Are there some bad landman apples in the barrel? Like any profession, the answer is yes (see When Landmen Go Bad: Butler, PA Landman Arrested for Fraud). However, the vast majority are honest, upstanding and dedicated professionals–and they do a job vital to the drilling process.

The American Association of Professional Landmen (AAPL) has 18,000 members. They recently launched a public relations campaign called “Meet Us” in which they use short videos to convey the truth about who landmen are, what they do, and how they do it…
Read More “AAPL Seeks to Set the Record Straight on Role of Landmen”
Bradford County | Lease & Royalty Payments | Pennsylvania | Susquehanna County

PA Marcellus Property Sold as High as $16,700/Acre at Auction
November 8, 2013November 8, 2013

This has to be a record for the Marcellus… The Pennsylvania court had ordered an auction of various parcels of land in Susquehanna and Bradford counties (in the prolifically productive northeastern “dry gas” portion of the Marcellus). There were 222 acres of land in total located in prime Marcellus drilling country. An auction was held on Oct. 30 in Wysox, PA and the land was all sold–to various buyers from across the country. Here’s the kicker: Some of the land sold for $16,700 per acre! This is rural farm land folks, not prime real estate in the middle of downtown. The money paid was not for a gas lease but the new owners get mineral rights with the land. You know the land was purchased in hopes of turning around and leasing it for Marcellus drilling. We don’t know for sure, but some of the land may even have been purchased by drilling companies (time will tell).

If we might immodestly say so, the ad agency that helped promote the auction wisely sought out and purchased advertising on MDN. You may have recalled seeing the ads during October? Looks like that proved to be a wise decision! Here’s the “let us toot our own horn” press release issued by United Country Real Estate–the company appointed by the court to list and sell the property:
Read More “PA Marcellus Property Sold as High as $16,700/Acre at Auction”
Beck Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Monroe County | Ohio | Utica Shale

Beck Energy Sues OH Attorneys for Lease “Interference”
October 30, 2013October 30, 2013

An interesting court case that landowners in Monroe County, OH with old (30 year-old) non-Utica gas leases will be interested in following. Beck Energy holds many of those old leases (originally signed for an average $50/acre) which allows them to drill vertically into the Clinton sandstone for natural gas. However, the old leases prevent landowners from signing new leases (at much higher signing bonuses) to allow Utica Shale drilling. Apparently some enterprising attorneys have taken up the cause by shopping (i.e. advertising) for plaintiffs and Beck is none to happy about it. Beck has filed a lawsuit against the attorneys and their law firms to stop them from making mischief with “their” leases.

After reading the details of whose done what to whom (below), it seems to MDN no one will come out of this one smelling clean…
Read More “Beck Energy Sues OH Attorneys for Lease “Interference””
Energy Companies | Harrison County | Hess | Lease & Royalty Payments | Ohio | Utica Shale

Harrison County: Busy Courthouse, Road Use & Lease Offer by Hess
October 28, 2013October 28, 2013

What’s going on in Harrison County, OH? When it comes to oil and gas drilling in the Utica Shale, quite a lot, including: a congested courthouse (where land records are kept); proposed road use agreements from Chesapeake Energy; and a plum offer by Hess for 21.7 acres west of the Harrison County Airport.

The details…
Read More “Harrison County: Busy Courthouse, Road Use & Lease Offer by Hess”
Lease & Royalty Payments | Pennsylvania | Statewide PA | Susquehanna County

PA Drillers Need to be Better Communicators
October 24, 2013October 24, 2013

Not everyone wants their land to be drilled for natural gas–even in Susquehanna County, PA where methane has been seeping out of the ground for 150 years. We respect that. In fact, we believe property rights are sacrosanct–if you don’t want drilling, you shouldn’t be forced to allow it. And conversely, those who want to lease their land and see drilling should be allowed to do so. Their neighbors should not be able to force them to abandon their rights either. Works both ways.

A story from Susquehanna County illustrates the tension landowners sometimes face in a decision about whether or not to lease. It also illustrates the sometimes confusing process that surrounds drilling a new gas well. One couple, not yet leased, learned (by accident) of a permit to drill a well on their neighbor’s property by Talisman Energy. There was nothing underhanded or wrong about Talisman’s application for a permit. However, this case points out the sometimes disjointed process landowners face in PA when it comes to leasing and drilling, and how drillers need to go the extra mile in communicating with them…
Read More “PA Drillers Need to be Better Communicators”
Chesapeake Energy | Energy Companies | Lease & Royalty Payments | Pennsylvania | Statewide PA

Does Chesapeake Deduct PA Act 13 Impact Fee from Royalties?
October 17, 2013October 17, 2013

Does Chesapeake Energy deduct PA’s Act 13 “impact fee” as an expense before paying royalties? The answer depends on whom you ask. Chesapeake says they do not, but at least one of their contracts, reviewed by the National Association of Royalty Owners (NARO), includes the Act 13 fee in the list of deductions.

So, do they or don’t they?…
Read More “Does Chesapeake Deduct PA Act 13 Impact Fee from Royalties?”
Energy Companies | Hess | Industrywide Issues | Jefferson County (OH) | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

Hess Will Challenge OH Court Decision to End Lease
October 17, 2013October 17, 2013

A few weeks ago MDN told you about the court case Hess lost where they tried to tie up the leases for Ohio landowners beyond the initial 5-year term (see Hess Loses OH Court Case, May Owe Big Bucks to 300 Landowners). What it amounts to is that Hess doesn’t want to pay them more money. The landowners who sued and won–Stephen and Melissa Griffiths from Jefferson County, OH–received an initial $6,500 in bonus payments in 2007 for their 228 acres. If they were signing a lease today they would get something like $1.5 million! Hess didn’t drill on the property during the 5-year term called for in the lease, but instead claim some cockamamie extension in the lease terms allows them extra time before they drill. Sorry Charlie, the judge said no.

Hess is miffed and says they will “vigorously challenge” the court decision, tying up the Griffiths’ lease for perhaps another year while this works its way through yet another court…
Read More “Hess Will Challenge OH Court Decision to End Lease”
Butler County | Crime | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Washington County

2nd Landman Pleads Guilty to Single Count in $2.4M Fraud Scheme
October 16, 2013October 16, 2013

A month ago MDN told you that one of two landmen accused of stealing mineral rights from unsuspecting landowners by forging signatures and using fake companies had plead guilty (see PA Landman Pleads Guilty to Defrauding Landowners, Off to Jail). His name is William Ray and he’ll not only do three years in the big house, he’ll also pay back over a half million dollars of what he stole.

At the time, Ray’s partner in crime (and the mastermind behind the scheme), Derek Candelore, plead not guilty. Yesterday Candelore plead guilty to one charge of mail fraud…
Read More “2nd Landman Pleads Guilty to Single Count in $2.4M Fraud Scheme”
Bradford County | Chief Oil & Gas | Coterra Energy (Cabot O&G) | Energy Companies | EQT Corp | Greene County (PA) | Lease & Royalty Payments | Pennsylvania | Susquehanna County

PA’s Top 10 Marcellus Shale Wells – Full Details
October 14, 2013October 14, 2013

Who doesn’t like a Top 10? We have one for you: What are the Top 10 producing Marcellus Shale wells in Pennsylvania? Would it surprise you to learn that 8 of the top 10 wells are found in a single PA county, drilled by the same driller?

Here’s the Top 10 PA Marcellus Well List, complete with the name of well, county, driller, estimated earnings per day and estimated royalties paid per day:
Read More “PA’s Top 10 Marcellus Shale Wells – Full Details”