Gas well lease update.

Rollie NE PA · Aug 1, 2009

Just a little more info on the gas lease. The lease we have was not written by the gas company but by a company called Conservation Services LLC out of Clarks Summit, PA

The lease was reviewed by different lawyers that said this is one of the best leases to protect the land owner that they have seen.

One of the members of our group also contacted the law firm of Pepper Hamilton whom also gave there approval.

The gas co. is paying 12.50 per acre for the 1st and 2nd term and 2,500.00 per acre after that.

Royalties are 20 percent with 1/2 percent going to Conservation Services LLC.

The property owner will also recieve 25,000.00 for each well pad.

The talk is there may be 1 well site every 80 acres.

Rollie

John - NY · Aug 2, 2009

This spring WhitMar offered $200/acre for each of two years and $2500/acre for each of two additional 5 year periods, but they could pick and choose whose property they wanted to continue with based upon 2-D siesmic testing. Up to now we hired an attorney to consult with that had helped broker another gas deal locally. We paid by the hour, but most attorney firms want $15 to $20/acre with a minimum of $300 and a max of $2500 per party. We've heard now that some of the attorney's want a percentage of the royalties on top of that - the greedy weasels! We haven't signed and have gathered together about 75 neighbors to form a small coalition with about 3200 acres. We are right on two pipelines including the 30" Millinneum Pipeline and in Broome County which should, by all indications, be as good as Susquehanna and Bradford Counties in PA. Thanks for the follow-up and Good Luck!

John - NY · Aug 2, 2009

Sorry, but I forgot to add that the offered royalty was 19.5%. Horizontal drilling techniques, which is the preferred method to maximize output from the well, should involve units of approximately 640 acres. The 80 acre figure sounds pretty small unless they're just doing a vertical well. Considering that these gas wells in prime areas are pretty much a sure bet, I'd hesitate to give either the attornies or the LLC any of the royalties. They should just be paid for their services and that's the end of it. You could end up paying them exorbitant fees for work performed and they'll gladly take it.

Rollie NE PA · Aug 2, 2009

John you are right about the 640 acre sections but depending on certain factors they may go as low as every 80 acres. I seriously doubt that it will be 80 acres.

I am less than 1/2mile from a Sun pipeline pumping station that is currently in mothballs. Also less than 4 miles (the way the crow flies) from a Transco pipeline.

Rollie

Gas well lease update.

Rollie NE PA

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John - NY

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John - NY

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Rollie NE PA

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