Lease & Royalty Payments

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…

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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:

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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…

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Chesapeake Energy | Columbiana County | Energy Companies | Lease & Royalty Payments | Ohio | Utica Shale

Utica Shale Drilling Heats up in Middleton Twp, OH
January 14, 2013January 14, 2013

Utica Shale drilling is heating up in Middleton Township (Columbiana County), Ohio.

Here’s the details on the one Utica Shale well now drilled in Middleton, the four coming soon, and how much the town was paid by Chesapeake Energy to lease six acres of town land:

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Energy Companies | Equinor/Statoil | Harrison County | Lease & Royalty Payments | Monroe County | Ohio | Tyler County | West Virginia | Wetzel County

Statoil Pays $590M for 70K “Wet Gas” Marcellus Acres
December 19, 2012December 19, 2012

In August, MDN told you that Statoil (a Norwegian company) was in the hunt for more U.S. shale acreage (see this MDN story). Statoil previously purchased a 32.5% interest in Chesapeake Energy’s Marcellus Shale acreage in 2008, securing 600,000 net acres for the company (but not as the “operator” for that acreage). They’ve been in the hunt for more, specifically to become an operator, and today they announced they’ve done a deal for an additional 70,000 Marcellus Shale acres—in the wet gas area of the play.

Statoil officially closed on the deal yesterday with Grenadier Energy Partners LLC, Protege Energy II LLC and PetroEdge Resources II LLC, paying $590 million for 70,000 acres in both West Virginia and eastern Ohio. The purchase price works out to be $8,429 per acre.

Here’s the Statoil press release announcing the deal, along with a slide presentation and map of the newly acquired acreage:

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Energy Companies | Gulfport Energy | Lease & Royalty Payments | Ohio | Rhino Resource Partners | Statewide OH

Gulfport Adds Another 30K Utica Net Acres, Pays $10K/Acre
December 18, 2012December 18, 2012

Gulfport Energy announced yesterday they have purchased another 30,000 Utica Shale acres in eastern Ohio for $300 million—or $10,000 per acre. That brings Gulfport’s grand total to 137,000 gross Utica Shale acres (99,000 net acres). Gulfport bought the acreage from its Utica Shale joint venture partner Wexford Capital. Perhaps a better way of phrasing it: Gulfport increased its ownership interest in acreage in which they’ve already invested.

Gulfport and Wexford, along with Rhino Resources, have previously invested in both two and three-way Utica Shale jv’s together (see this MDN story). So far, Gulfport has drilled the top producing wells in Ohio (see this MDN story for the secret to their success).

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Energy Companies | EV Energy Partners | Lease & Royalty Payments | Utica Shale

EV Energy Partners About to Shed Utica Acreage
December 18, 2012December 18, 2012

Landowners in the Utica Shale who signed with EV Energy Partners, take note: Your lease may soon be reassigned.

An article on the Seeking Alpha website takes a close look at EV Energy Partners (EVEP) and their large Utica Shale investments. EVEP is structured as a “master limited partnership” or MLP. The focus for an MLP is distributing (via quarterly payments called distributions) most of the profit made by the company to its partners/shareholders. Because of its MLP structure, long-term development of “speculative” plays like the Utica is not in line with the company’s mission, so EVEP is looking to shed most of it’s Utica Shale leases—and they’re doing it soon…

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Allegheny County | CONSOL Energy | Energy Companies | EQT Corp | Lease & Royalty Payments | Pennsylvania

Pittsburgh Airport Leases Land to CONSOL
December 17, 2012July 3, 2018

We have to wonder, was the fix in at the Pittsburgh Airport? MDN told you two weeks ago about the opening for two bids to drill on and under property owned by the Allgheny County Airport Authority (see this MDN story). EQT offered more than twice the per-acre signing bonus of CONSOL Energy. EQT’s bid to drill on 9,263 acres was $44 million!

On Friday, the Airport Authority announced that after two weeks of “very, very careful review” it has accepted CONSOL’s bid of $20.8 million as the representing the “best value.” Huh?

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Carroll County | Columbiana County | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio

Judge Tells Ohio Landowners They Can’t Break Lease
December 14, 2012December 14, 2012

A lawsuit filed by 95 landowners in Carroll and Columbiana counties (Ohio) has been decided in favor of Chesapeake Energy and against the landowners. Last month, Judge Richard Markus (Common Pleas Court) issued his decision that the landowners in the case could not break their lease if they received a better offer—something they thought they could do according to a provision in the lease.

Here’s the details of the case and the decision:

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Allegheny County | CONSOL Energy | Energy Companies | EQT Corp | Lease & Royalty Payments | Pennsylvania

Pittsburgh Airport Offered $44M Shale Drilling Lease Offer
December 6, 2012December 6, 2012

The Pittsburgh International Airport is about to get a huge cash infusion from the shale drilling industry—and it’s not from more passengers passing through the terminal (although that’s happening too). The airport previously floated a request for bids to allow drilling on and under its 9,263 acres. Wednesday morning they opened bids from two drillers: CONSOL Energy and EQT. One bid offered twice the lease payment per acre of the other bid.

Here’s the bid details (and a Marcellus and Utica Shale Databook lease offer map to provide context):

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Economic Impact | Energy Services | Enterprise Products Partners | Fairfield County | Industrywide Issues | Lease & Royalty Payments | Ohio | Pipelines

ATEX Express Ethane Pipeline Will Pay OH Airport $450K
December 5, 2012December 5, 2012

The Appalachia-to-Texas (ATEX) Express Pipeline, a 1,230 mile ethane pipeline which will run from the Marcellus and Utica region to the Gulf Coast is about to ink a deal with Fairfield County, OH Airport to allow the pipeline to run under airport property. If the deal is signed, as expected in the near future, the airport will receive $450,000 to allow the pipeline under its property.

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Energy Companies | Halcon Resources | Lease & Royalty Payments | Mahoning County | Ohio | Trumbull County | Utica Shale

Halcon Resources Responds to Lordstown, OH Landowners Group
November 30, 2012November 30, 2012

A few weeks ago MDN told you about a new landowners group in Lordstown, Ohio, formed in response to requests from Halcon Resources who is asking landowners in the area to sign modifications to existing 20-50 year-old leases on their property to allow for Utica Shale drilling (see this MDN story). At the time the new Lordstown Regional Landowners Group represented 5,000 of the 31,000 acres in Trumbull and Mahoning counties (Ohio) Halcon had recently purchased the rights to.

Apparently the movement has picked up steam and Halcon issued a press statement yesterday saying they want to cooperate with landowners to make them money on royalties, but stopped short of saying they would renegotiate leases, which is the aim of the landowners group.

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Columbia Pipeline Group | Columbiana County | Energy Companies | Energy Services | Hilcorp Energy | Lease & Royalty Payments | NiSource | Ohio

Some Brinker Field (OH) Leases Revised, Others in Lawsuit
November 23, 2012November 23, 2012

Hilcorp Energy was hired by Columbia Gas’ parent company NiSouce to drill Utica Shale wells in the Brinker Storage Field, a 35,000 acre area in Columbiana County, Ohio that Columbia has used to store natural gas going back more than 50 years. The original leases with landowners in the Brinker, leases passed down to new landowners over the decades, mean that landowners get zippo from any drilling—no lease payments and no royalties (see this MDN story for background).

Since the MDN story that first appeared in September, about 100 landowners have signed on to a lawsuit against Columbia and Hilcorp over the lease issue. But also since September, Columbia and Hilcorp have cut new leases with landowners not party to the lawsuit. We get the details of the lease terms from a story that talks about Hilcorp setting up a new office in Columbiana to work on land deals:

Read More “Some Brinker Field (OH) Leases Revised, Others in Lawsuit”
Carroll County | Chesapeake Energy | Columbiana County | Economic Impact | Energy Companies | Harrison County | Industrywide Issues | Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

Chesapeake Says 3 OH Counties are “Core of the Core” in Utica
November 21, 2012November 21, 2012

On the third quarter earnings call with analysts earlier this month, Chesapeake Energy officials were asked about the Utica Shale and their thoughts, now more than a year in, of how the Utica stacks up against the Eagle Ford, and how Chesapeake’s “core of the core” strategy is working in the Utica. Chesapeake CEO Aubrey McClendon answered the question this way, identifying the three counties in Ohio that are “the core of the core” for the company:

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