New Castle News

Local News

September 26, 2011

Hundreds signing Marcellus, Utica leases

NEW CASTLE — A leasing company is helping to negotiate Marcellus and Utica shale leases for hundreds of Lawrence County landowners.

Property owners showed up at the Cathedral over three days this month for a mass lease-signing. They joined a landowners group that had organized in North Beaver Township last year.

Chris Cracraft, sales director of Co-eXprise Inc., acted for the landowners to help negotiate leases with the Hilcorp drilling company, an operator that is a competitor to Shell Oil.

The deal will yield each of them a $3,000 gross per acre bonus payment, plus the landowners will share a 17 percent gross royalty payment.

The drilling company pays the bonus for the right to hold the property under lease for a specified period.

In the case of the North Beaver/Mount Jackson group, the lease is five years.

If, during lease period, the company drills a well, the landowners in a unit will share 17 percent of the value on whatever comes up in the way of oil, gas or constituents of the fuel, pro rated based on their acreage. It doesn’t matter where in the unit the production comes from, because all the landowners are in a pool.

A typical lease provides that landowners have a right to audit the books and records of a drilling company if they don’t believe the figures provided by the energy company. This gives the company an incentive to be accurate in their payouts.

Co-eXprise’s fee will be $240 of each $3,000 per acre received by the landowners.

“There are a lot of happy people,” Cracraft said of the arrangement.

He compared the deal with the state’s minimum for royalties at 12 percent net.

When word about the leasing terms spread among the landowners, more than 1,000 showed up for the signup, according to Cracraft, a former Mohaw area resident.

CoExprise has processed about half of those leases so far, which represent 18,600 acres.

The unprocessed ones are smaller tracts.

The Mount Jackson area alone includes 51,000 acres that are signed up to participate in the process, Cracraft said, but not all have signed leases.

“We help the landowners join together to give them leverage for a better deal, both for monetary and leasing terms, so they don’t get taken advantage of,” he explained.

Co-eXprise is an oil and gas leasing company that reaches out to about 180 different drilling companies to find the best leasing offer for landowners.

“We represent the landowners, not the oil and gas companies,” Cracraft explained. “And the first thing we say is, don’t sign. Do your homework and join an organization.”

The company is looking to help landowners who have 50 or more acres to lease, he said.

People whose properties qualify can still get in on the leasing on those terms by calling Co-eXprise at (724) 933-1180.

So far, landowners involved are from 20 of the 27 municipalities in Lawrence County, as well as nine in Mercer County and five in Beaver County.

(Email: dmorris@ncnewonline.com)

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