I inherited about 13 acres currently under a Chesapeake lease from my parents, that pays a paltry annual royalty. It currently has a shallow well and is part of a 1400 acres owned by my mother's family for decades. I have been approached to sell my acreage by a brokerage/mineral rights firm for $3K/acre. Is this even close to current pricing?
Nope. There are two formations under that property that could both produce huge amounts of gas. Companies are offering $2500/acre as their starting position for new leases (I know this isn't exactly applicable to you because your property is already leased). Most property would sell for at least $6000/acre. I think you should negotiate for a heck of a lot more than that.
By the way, if it's really a paltry amount under a CHK lease, you should check on the post-production costs to see how much is being taken out, then check your lease to see if it allows for that (it probably does, but it's worth it to check). Also, you could possibly argue that the well is not producing in paying quantities. It's a very fact dependent analysis, but it could get you out of the lease.
Thanks so much. Yes, really small - about $2 a year. Guess I would have to wait for the year end report to see those numbers you're talking about, unless its online or I knew where to call.
In my humble opinion, it is worth spending the money to have an attorney review your lease and check statements, especially since CHK is involved.
I agree with Kyle's statement, the current fair market price in Wetzel is between 5,000.00 & 6,000.00 / net acre.