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Discussion Starter #1
Was just contacted because our first gas lease is about to expire. Was trying to see what anyone else in the Indiana area has been getting recently? Going to be meeting with them in a couple weeks. I believe it is Chevron that owns our lease now?
 

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Contact some of your neighbors and see when they are expiring, the more land, the more bargining power you'll have or what they recently got..... Also when you go to sign the new lease have a lawyer (who specializes in GAS leases) go over it. Put in any provisions you want to, (ie- a no drill clause, no pipelines, etc) Depends on what you want, I would also try to include the Pugh (sp?) clause, which states that if they tie up some part of your property in a drilling unit, they can't stop you from leasing the other part if the lease come up again. This will ensure you have a greater chance of seeing some royalties. The companies are sinking wells, capping them and locking the landowner in with no royalties (for the short term) at times because they can't drill fast enough and get the infrastructure in place in time before the leases end....good luck.
 

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Seriously, you don't have to worry about negotiating anything. The gas companies are TOTALLY fair with landowners and do just what is needed to keep everyone happy. That wouldn't ever consider pulling the wool over a landowners eyes.

 

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ABSOLUTELY!!!!

I'm purty sure, from the ads down here, that Range Resources is the saviour of this state. I'm SURE of it. LOL
 

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My son bought 90 acres in Tioga County and built a home on it three years ago. It included a little over 100 acres of mineral rights, which he received after telling the owner no deal without the mineral rights. There was a ten acre lot and two one acre lots sold off it, so he figures he has the gas rights on those properties.

The lease was with Chesapeake and there are no restrictions on the lease, so he wanted to cancel it when the ten years expired. He contacted Chesapeake to cancel this lease, they informed him they had the right to extend it for 10 more years.

If you don't look out for yourself, there are a lot of parasites out there.
 

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RWBROOKSJR said:
My son bought 90 acres in Tioga County and built a home on it three years ago. It included a little over 100 acres of mineral rights, which he received after telling the owner no deal without the mineral rights. There was a ten acre lot and two one acre lots sold off it, so he figures he has the gas rights on those properties.

The lease was with Chesapeake and there are no restrictions on the lease, so he wanted to cancel it when the ten years expired. He contacted Chesapeake to cancel this lease, they informed him they had the right to extend it for 10 more years.

If you don't look out for yourself, there are a lot of parasites out there.
there isnt anything he can do he bought the property under and subject to the lease the gas company did nothing wrong. IMHO
 

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Perhaps the gas company did nothing wrong, but, his son should see a lawyer at this stage, if the lease is up, and find out what his rights are.
 

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My contract is expiring in a few months and got an interesting call from one of the gas reps this morning. She said I was included in a new unit and asked a few questions about my deed. Also mentioned they had a neighbor sign off on some things as his deceased father was the previous owner of the property. She said they do a title search going back 150 years.
 

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treestand91 said:
RWBROOKSJR said:
My son bought 90 acres in Tioga County and built a home on it three years ago. It included a little over 100 acres of mineral rights, which he received after telling the owner no deal without the mineral rights. There was a ten acre lot and two one acre lots sold off it, so he figures he has the gas rights on those properties.

The lease was with Chesapeake and there are no restrictions on the lease, so he wanted to cancel it when the ten years expired. He contacted Chesapeake to cancel this lease, they informed him they had the right to extend it for 10 more years.

If you don't look out for yourself, there are a lot of parasites out there.
there isnt anything he can do he bought the property under and subject to the lease the gas company did nothing wrong. IMHO
Your correct in that the gas Co did nothing wrong, it was the previous owner fault, looking for a couple $ a year. That is why anyone thinking of leasing, has to look out for number one, no one else will.

Only way to make money anymore, is at the expense of someone else. It's called good business.
 

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Contact a lawyer and take eveything these 'landmen' say with a grain of salt. They may have the option to re-lease but you may have the option of having them release at current rates since the value has gone up......get a lawyer who specializes in this stuff!
 

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Discussion Starter #13
Well met with them they gave an offer, we told them no way. Of course then they came back with a better offer that is as high as we can go they said. well I am still checking other neighbors and seeing who is leasing the most land in our area. they gave a 5 year and a 10 year lease to look over. I know they say stay away from 10 year leases, but when you are talking about nice $$ it is a hard to turn down I know alot of this is a gamble, but with no piplines in yet when would the roylaties come even if they drill??
 

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Royalties will come in once they start taking gas out of a well. One of the tricks they do to lock you in, is drop a well in and then cap it until they either get the infurstructure in or if the market is depressed (which it is) I would really think hard and long about locking yourself in for 10 years..(my opinion) But I don't know your financial situation, etc.... Did you look into a no drill and no pipeline on the property addedem added to the least...so you at least can negotiate a seperate contract if they want to run a pipeline though or have the ability to say you don"t want a drilling pad on your property....lots of things to think about.... I hope this helps....good luck!
 

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FWIW, I had some business yesterday with guys doing the seismic testing in Centre/Clinton Counties (400-500 square mile survey). Out of curiosity, I asked them what the current leases were going for, they told me $3000 per acre. Have no idea if this is in the ball park but what they told me.
 

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Discussion Starter #16
OneLongShot said:
Royalties will come in once they start taking gas out of a well. One of the tricks they do to lock you in, is drop a well in and then cap it until they either get the infurstructure in or if the market is depressed (which it is) I would really think hard and long about locking yourself in for 10 years..(my opinion) But I don't know your financial situation, etc.... Did you look into a no drill and no pipeline on the property addedem added to the least...so you at least can negotiate a seperate contract if they want to run a pipeline though or have the ability to say you don"t want a drilling pad on your property....lots of things to think about.... I hope this helps....good luck!
Thanks for the advice, bt the only thing that bothers me is if we sign the 5 year lease and they come in at 4 1/2 years and drop a well and cap it. There would be no royalties yet and would be out a bit of money if we would have signed a 10 year which they are offering a little over double the 5 year deal?? I know it is a gamble just thinking what if's?? Have any thoughts on this?
 

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I see you don't understand whats happening. It doesn't matter if its a 5 - 10 - 100 year lease, once your in a unit you will not receive any lease money.

Educate yourself as much as possible before you sign anything. Personally, I would not sign a 10 year lease.
 

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Discussion Starter #18
Renny28 said:
I see you don't understand whats happening. It doesn't matter if its a 5 - 10 - 100 year lease, once your in a unit you will not receive any lease money.

Educate yourself as much as possible before you sign anything. Personally, I would not sign a 10 year lease.
Renny what am i missing?? 5 or 10 year lease there is good differnece in upfront cash. if they drill or start anything before lease is up yes you are now in the production part of lease and will not see any more lease money. If you are put into a unit with no pipelines (infrastructure)etc. you will not see any royalties until pipelines go in. could be years so if that happened and it has already. you would be kicking yourself for not signing the longer lease for more money upront. since you could be sitting on a capped well and not seeing any monetary gains for years. Now if you only sigend the five year lease and it expires then yes you can negotiate a hopefully higher lease at that time. I see it as a gamble and again I could be missing something? they are offering lump sum payment.
 

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Maybe things have changed lately, but this sounds like a different lease than I have experience with. Please explain how this lease works? Up front cash??? What are they offering per acre 5 vs 10 years. The leases here are paid in full for 5 years...

You don't need to go go into details if you don't want to, I'm just curious......
 

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Ask for $5k per acre for the 5 yr and $7.5k per acre for the 10 yr. Ask for 20% royalties, reimbursement for any loss to surface land use, limit where they can place a pad (if you let them at all).
 
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