Chesapeake to hold lease-signing event for Towanda-area landholders

BY JAMES LOEWENSTEIN (STAFF WRITER)
Published: March 17, 2010

Article Tools
Font size: [A] [A] [A]
Sign Up newsletter

Chesapeake Energy Corp. has mailed out letters to certain residents in the greater Towanda area inviting them to a lease-signing event on March 20 at the Wysox Fire Hall in Wysox.

A copy of one of the letters of invitation shows that Chesapeake is offering 10-year oil and gas leases that would pay $5,000 per acre with a 20 percent royalty on gas that is extracted.

The letter indicates that Chesapeake has invited landowners from Towanda, North Towanda, Wysox, Standing Stone, Monroeton, Asylum, Wyalusing and Herrick to the event.

"Our records indicate that you own certain oil and gas rights that Chesapeake is interested in leasing," the copy of the letter states. "We will have personnel on hand to discuss with you an offer to lease [the oil and gas rights on] your property that will potentially allow you to share in the royalty pool to be established for wells to be drilled in your area."

Chesapeake spokesman Brian Grove declined to discuss the terms of the leases that are being offered.

"The terms of a lease are a business arrangement between Chesapeake and the mineral owner, so we prefer to keep that information in that context," Grove said.

Landowners who received the letter were asked to RSVP to Chesapeake before the event.

Grove also declined to say how many landowners were invited to the event.

However, he did say, in response to questions posed to him by The Daily Review about the event: "We are glad that so many in Bradford County are ready to partner with us to develop their gas rights."

Last September, Chesapeake offered leases of $5,750 per acre, plus a 20 percent royalty, to hundreds of landowners in the Wyoming County Landowners Group.

At its Jan. 28 meeting, the Joint Operating Committee of the Northern Tier Career Center in North Towanda Township approved a five-year gas lease with Chesapeake Energy for $6,500 per acre on the school's 73 acres, which includes a 20 percent royalty on extracted gas.

Chesapeake has offered to lease the gas rights on the land owned by Wysox Township at $5,750 per acre, with a 20 percent royalty on extracted gas.

James Loewenstein can be reached at (570) 265-1633; or e-mail: jloewenstein@thedailyreview.com.

Ads by Yahoo!






Type in the characters you see in the picture below. If you have trouble reading the characters in the picture, click it to see a new one.



13 posted comments

If I own half an acre, in downtown Monroeton, and don't plan to still be living there in two or three years, I can't see the harm in signing. If they are going to drill under me they're going to be doing it from some distance away. I don't expect to ever see any royalties, and for right now, the per acre price is not bad. Am I wrong?
Report
Morontown,  03/19/10 2:56
To the person in West Burlington. I'll give you an out. I'll buy your land, including the oil and gas rights, for its fair market value of 3 years ago. Will you sell it for that? Post your answer, and if its yes let me know how to get in touch with you.
Report
Nancy,  03/19/10 12:14
I have watch across the river the drill going up & it's 1 mile & 1/2 as the crow flies. It was noisy & the lights kept us up also.
We were just told a rig is going up on the property right next to us...several hundreds yards away! No sleep for how long? We will be camping away from here soon. The property owner does not live here so has nothing to loose & all to gain. Money does strange things to people!!
Report
No sleep in Standing stone,  03/18/10 6:19
To the person in W. Burlington - Thanks for sharing your experiences honestly. May you find peace and a carry a blame-free heart. The fault is not your own. We are being legally victimized.
Report
You are not a fool,  03/17/10 9:32
All of you who have not been paid your bonus money from Chesapeake's last round of leasing may want to show up at the firehall and ask Chesapeake...WHERE'S THE MONEY???
Report
askchesapeake,  03/17/10 7:20
I agree with "Beware the landman". They won't give you details on anything they are doing and don't care what happens on your property once they have you. I leased for $100 per acre and 12.5% royalties 3 years ago. At the time it was the going rate. Now CHK is drilling on my property, they put a pipeline across my property, which I couldn't stop, and I have a frac water impoundment 600 feet from my home. We have put up with mud, dust, truck traffic, erosion when it rains or we have snow melt, and heavy equipment noise since the end of August 2009, and no end to the disruption appears in sight. The money isn't worth it to me. If you want your quality of life destroyed, by all means sign a lease.
Report
Fool in W Burlington TWP,  03/17/10 2:51
Why?? You don't have a say when your mortgage company sell's its mortgage on your house to another financial institution. I suspect a lease is the same deal.
Report
#_#,  03/17/10 1:47
Jackie if you did not want them to be able to flip your lease, you should have included that restriction in your lease. If you read your lease, you will find they are allowed to flip it without your permission, as they have done.

Also, with the warm weather coming in strong and with the price of natural gas now heading for four dollars, anyone expecting to get rich from royalties needs a reality check. Those who have an operating well right now need to pray for it to be shut in or choked back. Don't ever forget, you own only so much natural gas. Once extracted it sells at the current market price. And when your gas is gone, it is gone.

What is worse, the decline curves on these shale wells are heavily slanted toward the first year or two of production. After that, even if the natural gas price recovers significantly, it's not going to help you very much. Because a great deal of your gas will already be gone.

Report
Maxwell Bender,  03/17/10 12:29
Canton resident. Land leasing deals are a function of land quality (the Marcellus has good areas and poor areas) as well as competition. Once a company has a dominant foothold in an area the land value decreases because competitors cannot get a viable foothold in your area. Either of these factors may be the reason for the difference. The bonus is nice, but the real value is the royalties and working with a responsible company that has an active development plan in your area. If a company leases and does not develop you're missing the real value of your land. Find out which companies, if any, are developing lands near you and that will most likely provide the best long term value for your land.
Report
anonymous,  03/17/10 12:04
I would like to know why Tailsman took over my chesapeake lease. I just got a letter that they have now taken over the lease that I did have with Chesapeake. No one from Chesapeake came to talk to me about this change. Is this a legal move or is it just a way to get rid of what they don't want and when it is time to sign back on will they offer you less or not at all?????? I think if our leases are going to be taken over by someone else we should at least have the right to know before it is done. My land lease is something I would like to have a say in after all it is my land, at least I think it is. This is something that you people may want to ask at your meeting.
Report
Jackie,  03/17/10 10:48
These are for parcels smaller than 3 acres. And it's doesn't matter the sign on bonus it's the 20% that matters. And did you work for any of this anyways? I wouldn't care if they gave mr 30 dollars.... Amazing how greedy you people get for something you never worked for.....
Report
Peter piper,  03/17/10 8:27
can anyone explain why that in canton township that they were offered 3000.00 per acre at 20% royalties and the more you go toward towanda and wysox it is better money but the same product.
Wondering Minds Would Like To Know...that is the Big Question For the Day
Report
Canton Resident,  03/17/10 6:29
An additional note is that the leases being proposed to these landowners are for 10 years, not the customary 5 + 5 which gives you an extra bonus payment if the company wants an additional 5 year extension after the first 5 years, so this is not a very good offer. The letters just arrived at homes this week, and a copy of the lease is not attached. It appears that CHK is trying to use the power of group psychology to ease people's minds about signing. Neighbors talk to neighbors, they convince themselves that it is ok to sign regardless of the fact that they know little about the gas business. Large numbers of unleased, small acreage residents show up to sign a lease that they won't eveb have seen until the event. Even if CHK does e-mail a copy of the proposed lease later this week to residents who respond that they are coming to the event, people will surely not have time to get the advice of their lawyers before signing. Although CHK says that you can get information at the event, it is clear that the instructions contained in the letter are aimed at getting you to sign on the spot, since all owners of a parcel are to attend, you are supposed to bring certain paperwork, etc. When you sign a lease, even on a small parcel, you are giving away some very important rights. Anyone who attends any event and signs on the spot without consulting a lawyer first is taking a big risk. Many landowners in the area, both large and small, have learned this lesson the hard way. GET YOUR LEASE REVIEWED BY A LAWYER. DO NOT SIGN ON THE SPOT. In other parts of the country such as Fort Worth Texas and many other towns and cities in shale gas plays, drilling occurs right inside the town or city limits. By getting the small landowners to sign, CHK will encroach upon the towns until they are finally in town
drilling on larger acreage. With just one large landowner on the edge of town leasing, and a whole bunch of little guys in town signing because they think there is no risk, a well will be drilled. This won't happen right away, thus the 10 year leases. There will be nothing you can do to stop them once they have enough signed leases to make a move on the town. A well is a much, much worse neighbor than the worst human neighbor you can possibly get.
I know everyone thinks they need the money they will give you, but it is really not that much when you consider that you are selling out your peaceful existance. If you think town traffic is bad now, wait until they are drilling and hydrofracking closer to, or in town. We will be able nickname Towanda "The Town that Never Sleeps" quite meaningfully. Do not take verbal assurances about anything from CHK or any gas company. Don't believe them if they tell you they won't drill in town. The only thing that counts is what is written in the lease document. Most of the rural residents in the area have now been told erroneous information multiple times. Many of us believe that the misrepresentations have been downright lies. This business has no scruples.
Report
Beware the landman,  03/17/10 5:43