We just had a recent offer from CHPK to lease some mineral rights in the NW corner of Sec 17 T11N-R15W. $2,000 acre w/25/% royalties. I am truly a novice at this but have been learning a great deal from some real pros on this site. Are there any other horizontals in this area or drilling activity? Just wondering if any others have had offers in this area and if the amounts seem fair. We currently receive royalties in Desoto parish on old wells in the cotton valley trend. As I said, I am a novice at this so please try to keep any responces simple

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There have been two fairly large deals done in Northeast Pennsylvania recently for $5500/ acre with a 20% royalty. 5 year term. No cost deductions. Friendsville Landowner's group. Go to the sister site www.gomarcellusshale.com for more details.

From what I can see, your biggest problem is that your land is in New York State. The government there is being unworkable in terms of moratoriums and permitting issues, all brought on by the greenie weenies and the powerful NYC lobby. If you look at drilling maps, there is a line of demarcation at the border between PA and NY. It will stay that way for a while. Given the choice to drill in one state or another, NY will be last due to its history of being unfriendly to industry. Current administration in NY State is not going to make that much better.

I'd hold off leasing for awhile until the permitting issues are clarified.
Grillin', for the most part I agree with you. New York does have the unfortunate habit of shooting itself in the foot on many an issue, not only in regards to horizontal drilling. One thing I would add to your post is that the Friendsville Group included several thousand acres in Broome County, New York as well as the bulk of the acreage which is in Pennsylvania. That deal set off a little bit of a bidding war between Fortuna which had secured the bulk of the Friendsville group landowners and Chesapeake who was then tried to horn in on the action. A big problem for many landowners nowadays in New York is a growing trend by both Chesapeake and Fortuna to hang on to the penny ante leases they signed people up for 5 years ago by invoking force majeure and various covenants in the leases, alleging delays in drilling to be beyond their ability as a private corporation to cope, and hoping thereby to extend those super cheap leases. I was curious if there is any such problem also in the Haynesville Shale?
In the HS there is no moratorium on drilling so the force majeure won't apply. I have no doubt that without the government's little moratorium there would be lots of drilling in NY state as there is a lot of nice rock up that way. So I'm guessing the Force Majeure may have a chance. I'm sure folks will rail against the companies for trying to enforce a contract, but its the contract. The companies will do all they can to follow the terms when they are in their favor! And there is nothing wrong with that.
Be sure to pay lots of attention to the terms of the lease other than just the dollar amounts. Watch out for things like no surface access, no automatic renewal, no rights to do seismography, no rights to run pipelines, no responsibility for you to defend the lease, etc.

I'm sure there's some other terms you want about what costs they can deduct, etc.

Be sure you get a check you can immediately cash, not a bank draft that may or may not get paid. Be sure that when you sign, you're getting a commitment from them to lease. I think some of the time, you're committing to lease, but they're not committing to it. i.e. They can back out, but you're on the hook.

Do we have a concise thread here somewhere of the terms landowners want to see or avoid in a lease?

How many acres?
Thanks Mac,

Got the papers in the mail today. They bumped up the dollar amount to $2500./acre. Have not had time yet to check out the terms you pointed out....but will. There are 23 acres involved. Thanks for your advice.
It'd be wise to get yourself an experienced landowner attorney. You'll be glad you did.

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