Joining a co-op?? What are leases going for?? - The HuntingPA.com Outdoor Community
 
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post #1 of 10 (permalink) Old 01-29-2013, 08:36 AM Thread Starter
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Joining a co-op?? What are leases going for??

I have a small camp (60 acres) in Allegany County, NY. It looks like fracking is going to pass in NY state soon, and I was approached by one of my neighbors to join an "alliance" of land owners sponsored by CX Energy from Wexford, PA, it looks as if they are a broker who shops around for the best gas lease offers. The pitch I was given is that the bigger the co-op, the more money we can eventually bargain for.

Does anyone have any experience with CX Energy, or a company like them?

My second question is, what type of money can I expect to get if I DO decide to lease? I realize that every area is different, but was just curious what the range might be. In all honesty, I'd rather keep the land for hunting & possibly retire there some day, but if I'm surrounded by wells, trucks, and drilling, I might as well join them if I can't beat them.

Thanks in advance. Uncle Nicky.

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post #2 of 10 (permalink) Old 01-29-2013, 09:02 PM
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Re: Joining a co-op?? What are leases going for??

Get a lawyer or make sure the group is representeod by a lawyer who is experienced with gas leases, lots of fly by night lawyers. Also make sure they have no ties or financial stake with the company you are represented by. The bigger the group the more companies you can entertain, don't just put all your eggs in one basket....make sure you have a lease that protects you as a land owner, if you don't want a big swath of your property with a well pad or pipeline on it, make sure it's in your lease. Don't jump at the first offer, shop, shop, shop, the bigger your group the better but also make sure there are no side deals with the group represnetatives to get money from the company to pull you in....get a good price and royalty, no less than 15-16%...maybe more if you can get it. Ask around, attend meetings and educate yourself to the good, bad and ugly with drilling......try to get a pugh clause in your lease too. (makes sure they can't lock one acre of your property in thus holding the other 59 acres hostage.....in a nut shell). Ask around here on the site, get your info and educate yourself.......I know this is rambling but protect your property and rights.

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post #3 of 10 (permalink) Old 01-30-2013, 12:43 AM
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Re: Joining a co-op?? What are leases going for??

Good advice.

I have seen leases go from $10 to $4,000 per acre, and royalitys from the Pa state minamum of 12.5% to 20%. Typically the higher the per ace money, the lower the royalty %.
There are a lot of factors that dictate price, including the amount of acres (group or co-op helps with that), what the siesmic testing shows, results of any wells that may be drilled in the area before you lease..etc...etc.
I would venture a guess that most of the leases in this area were signed between 2k and 2500 with 15% royality.....I would consider that a average.

Onelongshot-<span style="font-style: italic">glass</span> was correct when he said do everything you can to educate yourself before you sign any lease

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post #4 of 10 (permalink) Old 01-30-2013, 08:27 AM Thread Starter
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Re: Joining a co-op?? What are leases going for??

Thanks for the feedback guys. I think right now the co-op is in the shopping-for-a-lease stage, but my guess is this is going to happen fast.

Just curious, in these co-op type arrangements, is everyone offered the same amount of money/per acre if they sign the lease? Do you have the option to negotiate clauses in the lease (as you would if you were working alone) if you become part of a co-op?

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post #5 of 10 (permalink) Old 01-30-2013, 11:37 AM
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Re: Joining a co-op?? What are leases going for??

That's why you should see an attorney to ask these kinds of questions!

Off the top of my head...l. yes ; 2. no

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post #6 of 10 (permalink) Old 01-30-2013, 11:45 AM
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Re: Joining a co-op?? What are leases going for??

Nicky, down here, Chesapeke did a "grid" type of thing for royalties. The grid was/is based on 1 square mile (app. 640 acres). So if you owned 100 acres in the grid, and a well(s) were drilled by Chesapeke and produced within that grid, you would get a 1/6th share of the royalty it realizes. Not sure if that's good/bad, or even "normal", but that was my deal.

It's my understainding that Chesapeke has even pulled out from leasing in this area, and my lease expires in July, so I'm not sure what will happen next. I do know that gas prices are down, which is curtailing alot of activity. I'm sure that will pick up when prices skyrocket AGAIN.

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post #7 of 10 (permalink) Old 01-30-2013, 11:53 AM Thread Starter
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Re: Joining a co-op?? What are leases going for??

Quote:
Originally Posted by timberdoodle
That's why you should see an attorney to ask these kinds of questions!

Off the top of my head...l. yes ; 2. no
I'm in the research stage right now. An attorney will bill me just for talking to him. I've worked for attorneys before, some are good, some are pure garbage. I'm not looking for legal advice, just opinions & experiences, good or bad. I know that we have butchers, bakers, and candlestick makers that visit this site, maybe a lease attorney also might see this & chime in?

But, I guarantee, I WILL contact a good lease attorney if the time comes to sign paperwork.

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post #8 of 10 (permalink) Old 01-30-2013, 01:59 PM
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Re: Joining a co-op?? What are leases going for??

Most atty. will give a free consult... Even the very good ones..

Here is a site many have found useful

http://www.naturalgasforums.com/index.php

Good luck with it!

wmu 3A
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post #9 of 10 (permalink) Old 01-30-2013, 09:53 PM
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Re: Joining a co-op?? What are leases going for??

You can usually add a no drill or pipeline clause in your contract. Stay active with the decisions being made because some people will just see the money while others will look deeper before signing anything. Don't feel forced or be pushed into a quick decision, especially if the landman or the company is pushing it.They aren't going anywhere no matter what they may say. Take your time and make sound decisions and protect your interests......

Bradford County WMU3C
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post #10 of 10 (permalink) Old 01-31-2013, 07:25 AM
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Re: Joining a co-op?? What are leases going for??

Go Marcellus Shale

This website has a lot of good information.

Never heard of CX Energy but they appear to be a leasing group that will sell off to an exploration and production company. It is more important to go with a company that is committed to the area. More chance of a well or wells being drilled.

WMU 2B
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