Natural Gas Exploration and Leasing

bernie · Joined: 06 Jun 2008 Posts: 8

Has anyone in Bedford County had a better offer than $50 per year per acre and 15% ? I live in Southhampton TWP and there has been one, I guess, broker Trienrgy and one company Interstate Gas Inc. offer. Are there any other companies making offers in Bedford County?

bernie

farmgirl · Joined: 14 May 2008 Posts: 14 Location: Somerset county

We have had 2 offers, one from Powell Land group for $150. per acre for a 5 yr and 5 yr extension, 12.5% royalty. Then last week we had one from Tri Energy for $500. an acre for a 3 yr with a 3 year extension, and 12.5% royalty. I'm gonna wait and see, I talked to someone Friday who said there was an offer for $800. an acre, but I haven't had the chance to
talk to that family yet. Those are the ones I know about, but I was at the Somerset co courthouse last week, and it was packed with people, one of the clerks told me there was 8 different oil and gas companies there that day, she said they were in and out all the time checking records. If I hear of any other offers I will post them for you with the companys if I can get the names. Good luck with your search.

bernie · Joined: 06 Jun 2008 Posts: 8

farmgirl · Joined: 14 May 2008 Posts: 14 Location: Somerset county

Thanks for the info. It's good to find out how the crooked the companies are before we sign with them. I really don't trust any of them, they are big business and in it to make money and if they do protect the environment, it's only because there are laws that make them. I'm sure if the could get around the laws to save them money or make more money they would. I have a great property, by my opinion, the idea when I obtained it was to have something for my son and now his brother and cousins to have from their great-great grandparents. It make not function as the farm they raised their kids on but it's the land they worked with their hands and the ground they walked on, and the house they build by hand. I don't want it destroyed by some company who's only concern is profits. I hope that if I do lease someday it will be with a company that respects the lease they give us, and the land its on.
Good luck with going to the Bedford court house tomorrow, I don't know if they are as busy as Somerset was, but I'd imagine they are. I think all the companies are trying to lease up the properties for little or nothing, and make their money in flips or in the drilling. We have a neighbor, just over the Bedford co line who had the offer of $800. an acre to lease, but they are out of town so I haven't found the company name.
I'd like to get back to Somerset's courthouse on Thursday if my work allows, to see if I can print a list of all who have not leased in our township. I know if it weren't for the Johnstown news on channel 6 and Somerset Daily American I wouldn't have know about the web site or found the pagaslease web site. I've learned a lot and still have a lot more to learn. Let me know how you do at the courthouse.

bernie · Joined: 06 Jun 2008 Posts: 8

Today I went to the Bedford courthouse. They couldn't tell me the names of companies searching deeds for gas leasing but I did get a list of all the leases filed in the last six months. There were a total of 46 in Bedford County. None were in my township. The Lessees were Keeton Group LLC, R L Powell, Interstate Gas Marketing Inc. Steckman Ridge LP and Trienergy Inc. Trienergy had the most leases, 14, with Interstate second. Trienergy was just offering $10 an acre per year. I hope none of the folks signed for that.

OG_Geo · Joined: 11 Jan 2008 Posts: 116

FYI - Steckman Ridge is attempting to convert an small Oriskany field to gas storage. As far as I know, they are not taking primary production leases. Of course, I could be wrong Very Happy

bernie · Joined: 06 Jun 2008 Posts: 8

It is funny you should mention Steckman Ridge. It is only about 15 miles from my place. I talked with one of the people that have a well they want to store in. He and a bunch of other well owners are going to court over the storage because I think storage wasn't part of the original lease which was sold. The land owner was one of the fortunate few that was making $20K a month for three or four years. Then he was told the well has gone dry and it was going to be used for storage. Right now the well is capped and he is receiving one dollar an acre.

I have 155 acres here and I also want to leave something for my children and grand children. It would be so nice to give them some financial aid and a nice farm.

Also I forgot to ask. When you say the amount you were offered, do you mean for the five year period or one year? I have noticed a lot of people are talking a about the amount for the entire five years.

farmgirl · Joined: 14 May 2008 Posts: 14 Location: Somerset county

The Tri Energy lease was a three year lease with a 3 year extension,for 93 acres, I beleive. They would pay $500. an acre, for the first 3 year lease, then and additional $500. an acre for the 3 year extension. It was to be paid in two increments, around $46,500. within 90 days of signing and another $46,500. at the beginning of the extension lease. It sounds good but when you consider what other areas are making, for leases and the aggravation of a drilling rig in the field next to the house, with all the noise and lights. Plus the neighbors who are mad at us because of the noise, it's a lot more to consider. I know I'll be the mad neighbor when the trucks and rigs start going up and down past my house but thats how it is. I do need to look into the right of way issue, with properties behind me, i'm not sure the right of way would stand for drilling trucks. Anyway its a lot to consider, with the issues up state of the DEP stopping the 2 companies from drilling due to not having proper permits to use the water, I don't want to leave a mess for my kids when we have a beautiful property now.

bernie · Joined: 06 Jun 2008 Posts: 8

I have the same worries about this property to. I saw a local well after completion and it didn't look bad, just two pipes out of the ground and a pipe line. I saw a lease that the state uses when they get drilled on and they require a $10k set up fee for every hole that gets punched in the state ground. That would be nice for a the private property owner to recieve for the aggrivation of a well on the property. We have two more companies talking to land owners in my area now. Samson Resources Company and William Mcintire Coal, Oil and Gas.

farmgirl · Joined: 14 May 2008 Posts: 14 Location: Somerset county

Competition is usually a good thing. Have you heard if they are offering better amounts than the 1st company? There was a meeting in Somerset on 6/16 that was given by the Watershed authority. They had some good information about the type of addendums to protect the property owner and the land. They also had a coupple of lawyers there who would talk to
you if you had set up appointment to discus leases. At that point I had more questions than ever, but I hadn't set anything up so we came back home. I did find out there is a group of property owners near Meyersdale who are working on a lease agreement thru a lawyer-landowner and one of the companies. I don't know which company, I beleive the amount was in the area of $800. an acre, which is better than $500. But my concern is the addendums, i don't want to be liable for issues brought up at the meeting. I hadn't even thought that far down the road. The truth seems to me to be get the most you can for leasing because the likely hood of getting drilled on is around the 5%-7% out of 100% of the landowners. The was a web site listed on the pagaslease forum about a
company you can sign up through and they will market you to companies interested in the area you're at. I don't have the web site but if you want it I can get it. I went to the site and it seems legit but I don't know, I'm a little cynical about stuff.

bernie · Joined: 06 Jun 2008 Posts: 8

I attended a metting similar to what you described. I went to a meeting conducted by a person that will represent a group of land owners for a fee. His name was William Capouillez, Professional Geologist for the state during the day and a leasing contractor after work. He gave a very good presentation. He of course represents the land owners for a fee. He gets 25% of any bonus payed, 50% of all royalties over your best offer you could get on your own. You also can't do buisiness will any gas company he had direct or indirect contact with within one year of signing with him. He also recieves no less than $1/acre annual fee and no less than 1/2% royalty regardless of annual or royalty payments recieved by the owner.
I have a copy of the agreement.

farmgirl · Joined: 14 May 2008 Posts: 14 Location: Somerset county

Wow!! 25% of bonus paid could get you rich quick !!! The GFI group is only getting $200. out of $2300. I guess that would work out to about 10%, but they also get something like 1% of the royalty, also. I guess there is money to be made, if you were a lawyer or negotiator. I wish they would start a site where we could pull up lease addendums that the companys have already agreed to and what companies agreed to accept them. That way we could have a starting point. I know some of what I'd want as addendums but the wording needs to be right so there aren't loop holes for the companies. As for the getting rich part above, i guess you would need large groups of acerage and large bonus amounts to really get rich.

grass farmer · Joined: 29 Jun 2008 Posts: 2

I'm located in South Woodbury Township. Had a $50 5 yr 12.5% offer about a month ago. Now I just received a $200 5 yr. 12.5% from Interstate Marketing. I have been trying to get up to speed on this thing. I don't think that Bedford County has the gas reserves that other areas have but what is the true value of leases in ou area? Have talked to a couple of neighbors about getting together but I suspect that some have already signed cheap leases and are going to be very disapointed when they find out they could have gotten more and that the wording in these leases are not landowner freindly. There are a lot of landowners out there that don't have a clue what is happening and are going to get screwed. My 2 cents.

bernie · Joined: 06 Jun 2008 Posts: 8

We have been contacted by 5 different land men. Ben Lion of Interstate Gas has made the best offer so far. Or maybe I should say the lease that I'am the most comfortable with. $50 per acre per year for five years. 9/64th, or 14.0625% . Some of our addendum items are 1000 feet of consumer gas line installed, no storage, approval of well site, roadway, pipeline, meter site and pump station locations. We all struggle to try and get the best possible lease. If anyone has other addendum ideas, their input would be appreciated.

grass farmer · Joined: 29 Jun 2008 Posts: 2

I was contacted again by a Crissie Miller of Interstate Gas Marketing and the $200 offer was upped to $250 for 5 years without any prodding just that I told her I was doing my homework. If $50 came that easy I suspect their is a little more. Being on the edge of this Marcellus the question is what is this area worth?