I was recently informed of an inheritance of property in Washington County, Pennsylvania. It is located approx. 3 miles WSW of Burgettstown, PA. in Cross Creek TWP. It consists of 6.4 acres of sub-surface rights. These acres are part of a larger parcel. I've been contacted by Range Resources to lease them the rights to the Marcellus Shale deposits beneath. RR had a private firm track me down. Long story and un-important. But it does beg the question, in my opinion, why spend money to find me if they didn't want the rights pretty badly? Their offer is for $2000/acre and 17% royalties. The royalty payment seems ok. It falls into the middle of what I have managed to find out. However, the RR rep did mention that the Utica and Black Creek deposits are BELOW the Marcellus level and there is a possibility that more wells will be sunk to access these deposits. In my opinion, I believe $2000 is a lowball offer. Should I ask for more? Also, wth is a "landman"? A title searcher/consultant?
Does anyone have recent (within the last 6 months) info on RR leases and how much they were for?
My family has property in the middle of Cross Creek, leased and in production for a few years. I have no direct knowledge of figures for recent signings, but do have a good handle on activity in the area.
Range has no competition in the area and is in a good bargaining position. The only other companies that have signed landowners to leases in the last couple of years reassigned them to Range within a month. Rice signed a few hundred acres in Robinson Twp a while back, but nothing other than that. Atlas/chevron has a few wells around, but they are 5 years old. I didn’t look it up, but believe that one of the MCC partners units is close to you. Look at the unit declarations and well permit plat maps to compare locations.
I would pursue a higher royalty rate rather than trying to improve the sign on bonus. Ask for 18.75, be happy with 18.
Thank you for the help. I'm assuming that there are productive wells in that area?
Since RR seems to have monopolized the area, my bargaining position is pretty weak. So, I'll take your advice on the royalty payment.
I'll have my atty look into the well plat map also.
Cross Creek has some very productive wells. Not record-breaking, but lots of condensate and NGL production. The northwest corner has fewer wells than the rest.
If you look at some of the old threads here, I posted detailed directions on how to get the plats. One thread is titled "deeds" and the other "drilling permits". Of course, you can certainly pay someone to get the info for you if you like.