Lease & Royalty Payments

Antero Resources | Energy Companies | Guernsey County | Hydraulic Fracturing | Industrywide Issues | Lease & Royalty Payments | Noble County | Ohio

Muskingum Watershed District Signs with Antero for $40.3M Bonus
February 18, 2013February 18, 2013

Nearly a month ago MDN told you the directors of the Ohio Muskingum Watershed Conservancy District (MWCD) would consider a deal with Antero Resources to allow drilling and fracking on 6,700 acres under and around the Seneca Lake area (see OH Muskingum Watershed District to Sign Drilling Lease in Feb.). At the time, details of the deal were still not disclosed, but we theorized based on past deals the MWCD would probably make around $40 million in new lease payments.

The directors at the Watershed District voted to pass the deal last Friday. The amount they’ll get for a signing bonus? $40.3 million—or $6,200 per acre for leasing 6,500 acres (acreage number was adjusted down a bit). Plus 20% royalties.

Read More “Muskingum Watershed District Signs with Antero for $40.3M Bonus”
Anadarko | Athens County | Encore Energy | Energy Companies | Guernsey County | Lease & Royalty Payments | Meigs County | Monroe County | Morgan County | Noble County | Ohio | Utica Shale | Washington County (OH)

Encore Energy to Anadarko: We’ve Got OH Land for You
February 14, 2013February 14, 2013

A for-profit company that pools acreage from both landowners that want to lease their land, and from energy companies with leases who want to re-sell those leases, is trying to get the attention of Anadarko and other drillers in the Ohio Utica Shale. Encore Energy issued a press release yesterday announcing they have land available for lease. They specifically tap Anadarko on the shoulder to tell them they have 1,300 Utica Shale acres “just 3 miles” from land they’re already drilling on in Washington County, OH.

Encore is shopping more than 18,000 acres across a number of Ohio counties, including Morgan, Washington, Noble, Guernsey, Monroe, Athens and Meigs. Here’s their “hey Anadarko, pay attention” press release:

Read More “Encore Energy to Anadarko: We’ve Got OH Land for You”
Energy Companies | Gulfport Energy | Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

Gulfport Purchases More Utica Shale Leases for $10K/Acre
February 12, 2013February 12, 2013

$10,000 per acre seems to be the price Gulfport is willing to pay other energy companies to take over their acreage in the Ohio Utica Shale. Last December Gulfport paid $10K/acre for 30,000 acres (see Gulfport Adds Another 30K Utica Net Acres, Pays $10K/Acre). Yesterday Gulfport announced they’ve purchased another 22,000 acres from the same company, Windsor Ohio (a division of Wexford Capital), also for $10K/acre. This new acreage bumps Gulfport’s Utica Shale lease holdings to 137,000 acres.

Yesterday’s Gulfport announcement about their latest Utica purchase:

Read More “Gulfport Purchases More Utica Shale Leases for $10K/Acre”
Allegheny County | CONSOL Energy | Energy Companies | EQT Corp | Lease & Royalty Payments | Pennsylvania

CONSOL Increases Bonus Offer to Pgh Airport by 2.4 Times to $50M
February 11, 2013February 11, 2013

MDN has been following the deal to lease 9,263 acres of Pittsburgh International Airport land for shale gas drilling. As you may recall, there were two bids submitted in December, one by CONSOL with an 18% royalty and signing bonus of $20.8 million, and one from EQT, also with an 18% royalty but a hefty $44 million signing bonus—more than twice that of CONSOL. Logic would dictate that EQT’s bid would be accepted. But it wasn’t. The Airport Authority chose to accept CONSOL’s bid, leading us to theorize that the “fix” was in (see Inside Job? Pittsburgh Airport Leases Land to CONSOL).

A few weeks later word came out that the Airport Authority was negotiating with CONSOL to get them to raise their signing bonus, which seemed strange to us. We’ve never heard of a government agency accepting a bid and then turning around and renegotiating it (see Pittsburgh Airport Wants More $ from CONSOL…After Accepting Bid). It appears that “further negotiation” was successful. The Airport Authority now reports they’ve approved a renegotiated deal with CONSOL with a $50 million signing bonus—nearly 2 1/2 times the original amount offered when the sealed bids were opened in December. Anyone else smell rotten fish?

Read More “CONSOL Increases Bonus Offer to Pgh Airport by 2.4 Times to $50M”
Brooke County | Chesapeake Energy | Energy Companies | Lease & Royalty Payments | West Virginia

WV Park’s Marcellus Signing Bonus the Highest We’ve Seen
February 8, 2013February 8, 2013

In a story about a natural gas pipeline that will be run under a county-owned trail in Brooke County, WV, MDN spotted a brief mention about the signing bonus and royalty rate received by Brooke Hills Park in 2011 for drilling on 100 acres of park land. It is perhaps the highest per acre signing bonus we’ve seen for land in the Marcellus:

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Energy Companies | Energy Corporation of America | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Federal Judge Upholds Split Decision in PA Royalty Case
February 8, 2013February 8, 2013

A group of landowners who signed leases in western Pennsylvania with Energy Corporation of America (ECA) filed a lawsuit in June 2012 (Pollock, et al v Energy Corporation of America) alleging ECA improperly deducted certain expenses, and didn’t include certain revenues, when calculating and paying royalties. At the time, ECA counter-sued asking for summary judgment that the way they calculate royalties and revenues is OK according to accepted practice and previous court rulings.

Last fall Magistrate Judge Robert Mitchell “partially granted and partially denied” the summary judgment request from ECA. It was mostly a victory for ECA because it dismissed all but one of the charges by the landowners. The case was appealed by both sides to federal court and on Jan. 24, Judge Joy Flowers Conti of the Western District of Pennsylvania said Judge Mitchell’s interpretation of the case is correct. She upheld his decision. This is an instructive case for both landowners and drillers, and a caution to be sure the lease you sign spells out in minute detail how royalties will be calculated…

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Antero Resources | Belmont County | Energy Companies | Lease & Royalty Payments | Ohio

Antero Offers Barnesville, OH Residents $5,700/Acre 20% Royalties
February 7, 2013February 7, 2013

Normally drillers eschew drilling under cities or villages as a practical matter. Where do you put a drilling rig? What about traffic clogging up local streets? What if you can’t get everyone (or almost everyone) to sign? And why work to sign several hundred leases for a one square mile drilling unit with all of the deed research, negotiations, etc. that come with it, when you can sign leases with three or four people (farmers with lots of acreage) in a single unit?

The prospect of dealing with hundreds of landowners is not stopping Antero Resources (see Antero Resources Goes “All In” on Marcellus/Utica) from offering the residents of Barnesville (Belmont County), OH the same deal they struck last year to lease village-owned land: $5,700 per acre as a signing bonus, and 20% royalties on production.

Read More “Antero Offers Barnesville, OH Residents $5,700/Acre 20% Royalties”
Chenango County | Cortland County | Delaware County | Lease & Royalty Payments | New York | Ohio | Otsego County | Statewide OH | West Virginia | Wirt County

WV Group Largest Landowner Coalition in Marcellus/Utica
February 5, 2013February 5, 2013

A group of landowners in Wirt County, WV have just taken the crown as the largest landowner coalition MDN is aware of in the entire Marcellus and Utica Shale. The Wirt County Oil and Gas Group closed the door on new signups as of Monday, and the total acreage represented by the group is an astonishing 227,000 acres—almost 1/4 million acres! The really attractive part for potential drillers? The land is located in the wet gas area of the Marcellus.

The next largest group MDN is aware of is in Upstate New York—the CNY (Central New York) Landowners Coalition—with 194,500 acres. Both the Wirt County and CNY coalitions have representatives in Houston this week for the NAPE Winter Expo, shopping the acreage looking for a lease.

More details on the Wirt County group:

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Columbiana County | Lease & Royalty Payments | Ohio

Caution: The Timeline for Leasing Your Land is Finite
February 4, 2013February 4, 2013

A cautionary tale for landowners (and governments) looking to lease property. There is a finite window of time when your property is desirable and once that window closes, it may be tough to find a lease.

The village of East Palestine (Columbiana County), OH with 130 acres of village-owned land to lease is finding that out—the hard way:

Read More “Caution: The Timeline for Leasing Your Land is Finite”
Cambria County | Chesapeake Energy | Energy Companies | Greene County (PA) | Hilcorp Energy | Lawrence County | Lease & Royalty Payments | Lycoming County | Pennsylvania | Pennsylvania General Energy | Washington County

PA Game Commission Gets Big Royalties on New State Land Leases
February 1, 2013February 1, 2013

The Pennsylvania Game Commission voted on Wednesday to approve oil and gas drilling agreements on state land in five PA counties—some of the deals are new and some are extensions/renewals of existing deals. That’s newsworthy in and of itself (and sure to drive anti-drillers bonkers).

The news for landowners in this story, however, is the royalty percentages for the new land deals. Some impressive numbers:

Read More “PA Game Commission Gets Big Royalties on New State Land Leases”
Belmont County | Energy Companies | Gulfport Energy | Lease & Royalty Payments | Ohio | Utica Shale

Mind-blowing Earnings from a Single Utica Shale Well
January 28, 2013January 28, 2013

Wow! Some truly astonishing numbers (if they hold up) for the earnings power from a single Gulfport well in the Utica Shale of Belmont County, Ohio. According to a WVU professor who tracks these things, the Stutzman well, when brought online, will be earning in the neighborhood of $100,000 per day for Gulfport, and a huge royalty check for the landowner.

Here’s the calculations:

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Economic Impact | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Statewide PA

Royalty Payments to PA Landowners Create Big Impact
January 28, 2013January 28, 2013

An analysis by AP finds royalty payments to landowners in Pennsylvania are quickly catching up to royalty payments to landowners in other oil and gas states like Alaska and Wyoming. The National Association of Royalty Owners (NARO) said PA is their fastest growing chapter.

How much in royalty payments were PA landowners paid (collectively) for 2012? What’s the average percentage landowners are paid? And which driller has paid more than $1 billion in royalties to PA landowners since 2008? Some answers about royalties in general, and PA in particular…

Read More “Royalty Payments to PA Landowners Create Big Impact”
Allegheny County | CONSOL Energy | Energy Companies | Lease & Royalty Payments | Pennsylvania

Pittsburgh Airport to Hold Public Hearing on Lease Deal
January 28, 2013January 28, 2013

Since the middle of December MDN has been squawking about the Pittsburgh Airport’s decision to accept the (much) lower bid from CONSOL Energy to drill on 900 acres of airport-owned property (see Inside Job? Pittsburgh Airport Leases Land to CONSOL). Apparently others squawked too because a more recent story reported the airport is negotiating with CONSOL to double the bonus payment they just accepted (see Pittsburgh Airport Wants More $ from CONSOL…After Accepting Bid).

We expect board members from the Allegheny County Council—the people in charge of the airport and approving the deal—are about to get an earful at a public hearing about the deal being held on Feb. 7. Here’s the details for that hearing:

Read More “Pittsburgh Airport to Hold Public Hearing on Lease Deal”
Antero Resources | Energy Companies | Guernsey County | Hydraulic Fracturing | Industrywide Issues | Lease & Royalty Payments | Noble County | Ohio

OH Muskingum Watershed District to Sign Drilling Lease in Feb.
January 21, 2013January 21, 2013

Last November, MDN told you that the Ohio Muskingum Watershed Conservancy District (MWCD), the largest watershed district in the state covering about 20% of Ohio’s landmass, had entered negotiations with Antero Resources to allow drilling and fracking under MWCD land around Seneca Lake (see OH Muskingum Watershed District Seeks Lease with Antero). Everything but the final price is now done, and the proposed lease (copy embedded below) will be voted on at the next board meeting of the MWCD on Feb. 15.

The lease, as written, will allow drilling under but not on 6,700 acres of property in Guernsey and Noble counties. Antero will have to drill from adjacent properties to reach the land—no disturbance of the surface will be permitted. How much will the MWCD get for a signing bonus and royalties?

Read More “OH Muskingum Watershed District to Sign Drilling Lease in Feb.”
BP | Energy Companies | Lease & Royalty Payments | Ohio | Trumbull County

BP Cancels Deal for 7% of ALOV Leases in Trumbull County, OH
January 18, 2013January 18, 2013

In March 2012, BP signed a huge deal with landowners belonging to the Associated Landowners of the Ohio Valley (ALOV) group to lease 84,000 acres in Trumbull County, OH (see BP’s Big Utica Shale Deal, Leases 84K Acres in Ohio). The terms of that deal were $3,900 per acre as a signing bonus and 17.5% in royalties. Very sweet indeed.

Part of the process when signing a lease deal is “due diligence” in researching property deeds to be sure the driller will have a clear right to drill on or under the property. About 180 landowners with a collective 4,203 acres didn’t make the cut for the ALOV deal, and their contracts, according to the terms of the lease, were “released” this week by BP:

Read More “BP Cancels Deal for 7% of ALOV Leases in Trumbull County, OH”
Allegheny County | CONSOL Energy | Energy Companies | EQT Corp | Lease & Royalty Payments | Pennsylvania

Pittsburgh Airport Wants More $ from CONSOL…After Accepting Bid
January 18, 2013January 18, 2013

The story of the Pittsburgh International Airport’s acceptance of a bid from natural gas driller CONSOL Energy to drill on and under airport property, a bid that would provide less than half the money that a bid from EQT would have provided, continues to get curiouser and curiouser (see Inside Job? Pittsburgh Airport Leases Land to CONSOL for background and MDN’s original comments).

Apparently MDN isn’t, as we had thought, the only one who noticed this deal smells to high heaven. The latest news: PIA is negotiating with CONSOL to get them to raise the signing bonus, which is now rumored to be somewhere in the neighborhood of “$35 million to $40 million.” That’s certainly better, but still not has high as EQT’s offer of a $44 million bonus payment.

And what’s with “negotiating” after a bid has been accepted? A bid is a bid—you accept or reject it, especially if a public agency is involved. You don’t accept an offer and then promptly start negotiating to change it! Something is still very “off” about all of this…

Read More “Pittsburgh Airport Wants More $ from CONSOL…After Accepting Bid”