My family inherited a significant set of WV mineral rights. We might be interested in leasing, but we’re unsure about the best approach to the leasing process. We know the acreage was leased decades ago. What’s the best approach to determine the marketability of these holdings? Our concerns are about securing a fair value and avoiding problems.
We know a thorough estimate is costly and no guarantee of marketability.
Any help is appreciated.
I would like to note that this group of rights is located in the Clinton District and was recently separated from the surface. There is a single owner.
Generally, you don’t ask a company about leasing; they ask you - and only if it is a favorable area and they are working on things to drill a new well or rework an existing one. If this is not the case, then at this time your rights have no marketability. The exception to this is if you own rights in a producing well that you want to sell.
Thank you. The existing wells and pipeline, I am sure, are documented in the industry. How may we assess what infrastructure exists? Is there a way to research it in public records?
I would start with the WV Oil & Gas Commission or the County Clerks Office for where the rights are located. It seems that every state has its own way of doing things, and these are the two most common places to start. Sometimes you can just google phrases like Clinton District Oil & Gas or West Virginia Oil & Gas or Clinton District WV and go thru the websites that pop up. You may also have to call the county or state offices for further info.
@W_Pfost Marketability depends on:
Location: A lot of Clinton District to the east, the Marcellus shale fractures out, and it’s not worth a drilling operator setting up pad sites. Chesapeake drilled two test wells along Route 73 near White Day Golf Course that depleted quick in two years, and the MCF dropped sharply. You can always try Northeast Natural Energy, but I recommend waiting and having the operator present a new lease. When you approach an operator to lease, they will give you a very poor lease with no room for negotiation.
Thank you very much, that’s my assessment as well. These properties are situated near and under Interstate 79 and have had a gas and oil lease for decades, which evidences that some companies have found value in the investment. There are two shale layers - the Marcellus and the Utica, which I understand to be deeper and much richer than the Marcellus. Is there a barrier to mining the Utica?
Not a whole lot going on in Clinton District – SWN leased some stuff in West Central Clinton in 2017, and a group called Pauley Realty has been taking some leases in that same area, which they clearly intend to flip. Geology is not great, and a very dry gas area. Aside from one unit, drilled by CHK, and now operated by Expand, there has been no marcellus development in Clinton. I would not expect any leasing activity in the area until producers drill of their inventory in more favorable areas. Elevated, prolonged nat gas prices would be a must. There is a fair amount of shallow wells from legacy leases in the eastern portion of Clinton. When you say it has had a lease on it for decades, are you saying shallow wells were drilled and it is paying royalties or delay rentals?
Thank you for the charts! In perfecting the title to the properties, I came across documents indicating that there had been leases paying royalties for decades, starting perhaps (from memory) in the 1960s or 70s and ending in the 1990s. I have no information on whether the wells were shallow, but I gather from the posts here that they were likely relatively shallow and extended into the Marcellus layer.
What is the URL of the website where you find the well information?
I have scant information on former leases, which is primarily anecdotal. Previous family owners (now deceased) were generally ignorant of mineral rights from the records and contacts we made, and cannot be considered reliable.
Priority #1 would be to determine lease status of your interest. If its a larger interest I would be somewhat surprised if its not HBP by shallow production; meaning its not available to lease. If ownership has changed hands numerous times its possible you need to do a change of ownership. I can supply quite a bit of information if I had parcel numbers. Up to you if you want to share that. Or at the very least the acreage. I can find it by that.
Can I PM somehow? I’d rather not post that publicly.
I don’t think you can PM on this forum, at least I haven’t figured out how to. I read through the previous conversations and based on what I’m seeing from operators, your property is very unlikely to be favorable for a lease. There isn’t any activity in that area, nor have I heard of anything planned up there for the foreseeable future. If you are looking to extract funds from this property, selling will probably be your only option. What WVOGM was referring to with "HBP (held by production) is that if there are any wells at all on your property that produce oil/gas, you’re locked into the historic lease and it cannot be changed. Basically, no one will lease with you because it’s already leased. If you know your parcel number and location, you can use the interactive map they linked to see if any wells are on it. They appear as tiny red dots when you turn on that filter. Red dots means it’s producing. Also, shallow wells did not extend to the Marcellus, only far enough to reach gas.
It appears messaging is reserved for website staff members. I’ll look it up and see what I can find. I know of no present leases.
Unfortunately, that link does not work for me.
You seem to be a bit more confused by what you are being told, so, since you seem to think you have a lot at stake, I’m going to suggest that you hire an oil & gas attorney to do the legwork for you and give you straight answers. A few $$ spent to protect possible assets could be well worth pursuing.
I think that’s good advice. Especially when weighing conflicting information.
