Hello everyone. With in the past couple of years, we have come to learn that my great-great grandfather had retained the mineral rights for some land (around 55 acres) in Washington County, PA. I believe it is West Pike Run to be exact.
We were initially contacted by someone wanting to out-right buy the rights, and we declined. Not much longer, we were contacted by an energy company regarding leasing.
So, my questions are:
What does anyone now of Rice Energy? They seem to well liked by their customers from what I can find.
What is a fair bonus price per acre in this area? I thought the price quoted to us seemed nice, but I am seeing that some folks are getting around $5000 per acre! Not sure to the truth of that though.
Is there anything particular that we should be aware of when negotiating / signing a lease in this area? I know we want to be aware of clauses about "post production costs" and we definantly want some sort of clause that they return the land to normal after the well life ends.
I also am wondering, that if we only have 55 acres, there must be adjunct land that is being leased as well? No? I was under the impression that a drill pad consisted of 640 acres. I don't know! All new to this!
BTW: The "we" consists of my Aunt, and my two other siblings. So, four of us in this adventure!
Rice has the only two horizontal wells in the township, the Lusk wells. They are a smaller, private company with a good reputation. They seem to have a good balance of finances - they have enough money to pay for the best technology, but little enough that they'll only drill wells that they intend to produce from. According to this thread, there are blanket offers of $6k/ac in certain townships a bit to your northwest. That's with relatively good lease language.
Antero has done some leasing in the general area, but seem to be concentrating on WV now. Chevron/Atlas has a bunch of wells a few miles to your southwest - Atlas had a terrible reputation, but may have improved since they were bought out. Chesapeake has sold/traded most of their acreage in the county, but still has some in the west townships.
In general terms, focus less on the bonus and get the royalty and terms you want. If you only own the gas and mineral rights, don't spend too much time negotiating on someone else's behalf about the surface reclamation.
Alicia,
The first and most important thing to remember is to not make any rushed decisions. If someone has offered to buy and a company has approached you to lease, the market is already telling you there's a demand for your property. Research as much as you can and become as familiar as possible with what's going on in your area. MineralRightsForum.com is a great place to start and there are a lot of helpful individuals here.
As far as signing a lease, you can ask to review the lease before the deal is done and it never hurts to have a landman review it to make sure the terms are what were agreed upon and are also favorable to you. Regarding the unit size of 640 acres, yes the operator will need more than your 55 acres but they will handle that piece of it and they have either already leased the land they need or you are one of the first they are approaching.
Hope that helps!