I was contacted by Chesapeake Appalchia LLC about a mineral lease and 1st offer was $200 per acre with 12.5% royalty. I know the 1st offer is always usually low, but am trying to find out a fair market value. I had asked for a free gas tap for my home use and was told they no longer offer this due to having to drill so deep for the natural gas that the pressure was too high to run to home. I believe this is BS, because after doing some research, I see that Chesapeake is only securing permits to drill for oil. Other companies are securing permits for oil and gas. I am going to talk to rep again and ask straight out of they are even interested in Natural gas to see how they react. I believe if it is indeed oil, they are after, then I should get a better lease offer and better royalty %. Any info out there? I am in the Webbville/Willard area on the Lawrence/Carter County line.
$200.00 - $250.00 per acre is what most are offering in the area. This amount will stay in that range until a proven play happens in the area. Some will offer the gas tap for a home and some will not. All depends on the operator. Oil or natural gas makes no difference in the lease bonus per acre or % royalty to most operators in what they are offering. 12.5% before deductions is the norm right now, but have heard of more. If they have told you they are not interested in natural gas then have them write the lease for oil only and see what they say.
Thanks for the info kyoilgas. I am pretty sure there is already some activity just down the road about 2 miles from where I live. There is a tank with a NYTIS sticker on it and oil derek has been moved in there, but does not seem to be pumping yet. I have been looking at some maps and looks like this area is directly in the Rogersville Shale area and I have read some of the articles you had posted in other groups here. In your opinion, what do you feel the area has the potential for lease bonus and royalty %?
kyoilgas said:
$200.00 - $250.00 per acre is what most are offering in the area. This will stay in that range until a proven happens in the area. Some will offer the gas tap for a home and some will not. All on the operator. Oil or natural gas makes no difference in the lease per acre or % royalty to most operators in what they are offering. 12.5% before deductions is the norm right now, but have heard of more. If they have told you they are not interested in natural gas then have them write the lease for oil only and see what they say.
The deep Rogersville Shale is only one of the many different "levels" in the Rome Trough. It does seem though that it is the play that is drawing the most interest form operators at the moment. As far as potential for lease bonus $ and royalty, that's a hard one. Most the time it looks like once a big play is found and actually producing, that is when the $ and royalty start to rise as more operators look to stake a claim on the activity. Right now I look at it like they just starting the "let's look and make sure what we think is there is there." period. That is my thought on it. And I am by no means an expert. You might want to check with your neighbors between you and the existing pad you are talking about to see if they have been approached and by whom.
Brian Mollett said:
Thanks for the info kyoilgas. I am pretty sure there is already some activity just down the road about 2 miles from where I live. There is a tank with a NYTIS sticker on it and oil derek has been moved in there, but does not seem to be pumping yet. I have been looking at some maps and looks like this area is directly in the Rogersville Shale area and I have read some of the articles you had posted in other groups here. In your opinion, what do you feel the area has the potential for lease bonus and royalty %?
kyoilgas said:$200.00 - $250.00 per acre is what most are offering in the area. This will stay in that range until a proven happens in the area. Some will offer the gas tap for a home and some will not. All on the operator. Oil or natural gas makes no difference in the lease per acre or % royalty to most operators in what they are offering. 12.5% before deductions is the norm right now, but have heard of more. If they have told you they are not interested in natural gas then have them write the lease for oil only and see what they say.
$200.00 per acre, 12.5 - 15 percent. Demand free gas because whether they are drilling for oil or deep gas the gas is there. If your lease is more than 3 pages then they need room for hiding lies. Unless you are dealing with Donald Trump and that's for the lawyers to handle. Even with 3 pages I would have a Lawyer take a look. Not their lawyer though. I am just saying be care full these people play for keeps, and as soon as they get your signature those smiles and verbal promises are in most part gone. Let God guide you, Thank you and God Bless.
My family leased 1800 acres to cimarex in lawrence county. We got 200 an acre and 12.5%. We also got a gas tap for homes. Our family is very big. and it could be alot of homes. Does anyone know what is going on in the Blaine area of ky ?
Cimarex is very active in Lawrence and Johnson counties. They competed their deep Rogersville shale test earlier this year. They are continuing to lease as fast as they can via Gulfland. Have heard that they may have as much as 130,000 acres already leased.
I just received an offer from elhas industries to purchase my mineral rights on the 77 acres i own in lawrence county ky.
the property is under lease to gulfland right now what would be a reasonable offer for the mineral rights
any one receiving offers for there rights?? im in the webbville area south on 201 at twin licks rd
thanks
My thinking is to never sell your mineral rights. If they are wanting to buy them, then there is something there that is pretty valuable and they will always offer some crazy low price so they can make a mint.
ronnie j hicks said:
I just received an offer from elhas industries to purchase my mineral rights on the 77 acres i own in lawrence county ky.
the property is under lease to gulfland right now what would be a reasonable offer for the mineral rights
any one receiving offers for there rights?? im in the webbville area south on 201 at twin licks rd
thanks
I agree with Paul on this one. You will never receive anything near the amount that you will get by keeping your rights. Also, if you are leased with Gulfland then Cimarex will be the operator as Gulfland was leasing for Cimarex. Unless they sell the lease. Which is possible as operators sell and trade large blocks of acreage quite often. That said, Cimarex is one of the better operators around.
Paul said:
My thinking is to never sell your mineral rights. If they are wanting to buy them, then there is something there that is pretty valuable and they will always offer some crazy low price so they can make a mint.
ronnie j hicks said:I just received an offer from elhas industries to purchase my mineral rights on the 77 acres i own in lawrence county ky.
the property is under lease to gulfland right now what would be a reasonable offer for the mineral rights
any one receiving offers for there rights?? im in the webbville area south on 201 at twin licks rd
thanks