Leasing Update

I spent some time over the weekend updating my compilation of all of the lease offers I've seen from news articles, discussion forums and landowner groups. Prices continue to be highest in the northern most parts of the play. To the southwest and into West Virgina, prices head lower though, interestingly, royalties are somewhat higher.

In the north, bonuses are highest along the east-central New York-Pennsylvania border with 5 year leases in the $2,500 range and 15% royalties being the norm. Extension options are running 3-5 years and usually for the price of the intial term.

In the middle of the play, southwestern PA, royalties are in the 15-18% range with bonuses now at $1,000/acre and rising. Notwithstanding the speculator bids of $50-$250, Atlas, at $500, is at the low end while Chesapeake and Range are battling it out at the high. Two weeks ago, the majors were generally about $250 lower.

In the south, West Virginia landowners are seeing offers in the $300 range and royalties at the traditional 12.5% with a few at 15%.