we had a lease with Chesapeake, in Bradford county pa, Marcellus shale. It ran out end of January, they never drilled. We had chief oil and gas call a couple weeks ago, but I was sick with the flu. He hasn’t called back yet, but I was wondering what is the going rate for leases and the sign on bonuses? Anyone know? It’s on 95.5 acres.
Wendy,
In 2015/2016 a major US Bank required that I do a mineral development potential study in the area of Wyalusing Township in Bradford County. In the course of my study, I found that Chesapeake held a large acreage posituion and was systematically developing its holdings in a deliberate manner. Exploration and production companies are very clever at maximizing acreage control in the final configuration of drilling units in metes and bounds states like PA. All or a part of your acreage may be in a unit which could make it HBP (held by production) under the terms of the lease you signed. Best stay out of a lease with anybody else for a few months or until you find out exactly what Chesapeake has done. If you top lease or sign a new lease with a third party, you could create a significant liability for yourself.
At the same time, 95.5 acres is of great value to Chesapeake making it possible to get lease terms that are reflective of proven non-producing resources which are much better than any "going rate" terms. You will have much better control of lease terms going forward and make certain you do because the next lease you sign will likely be the last one ever offered during your lifetime. Anyway, don't lease to others until you have a release from Chesapeake or an agreement from a new lessee absolving you of liability from the expired? lease.
Gary L Hutchinson
Thanks for the heads up. We weren’t the original owners when the lease was signed with Chesapeake. So I’ve only skimmed the lease. We have had the property for most of that time though, 10 years, it was signed probably a few months before we bought the land. We did get the renewal at the five year mark, but it wasn’t much, the original owner signed on before anyone knew what would become of all this. I do believe the lease says it expires if no drilling has happened, which it has not. We are not in any unit, as we’ve never received any royalties etc. I do work for a lawyer though, so maybe I’ll have him take a look for me. Honestly, we would love a good offer, as we have a lease with Chesapeake on our other property where we live, 6.73 acres. The royalties aren’t much and have dimished over time. Although I know it’s not much acreage. Drilling has not been what it was, so we’ve pretty much written it off. So I was surprised by the call.