Leasing Update

$3,000/acre Bonus Barrier Broken

Since the last report in late May, prices have risen throughout the play with the greatest percentage increases seen in southwestern PA. Prices for 5 year leases have cracked the $3,000 level in the northeast with reports up to $3,400 an acre while a few deals in the $2,700-$3,000 range have been made in PA's southwestern most Greene County. This is remarkable considering that two months ago, the highest reports in the area were in the $1,500 range with the average lease being under $1,000. It seems that the water issues in the Susquehanna basin and Range Resources' recent successes in Greene county are creating more interest there.

Between those hot spots, prices trend lower in more central PA as you head west and south. From $2,500 in Tioga to $1500 in Clearfield to $800 in Somerset counties.

West Virgina has seen increases in the northern part of the state in Preston and Tucker counties where bonuses have moved from the $350 to $450/acre area.

Royalties are following the bonus trends and have stayed fairly flat in the 12.5% to 18% range.