OGM Dead Zones

[cushie0105]

Hey everyone,

I'm working a lot in Susquehanna County, PA, and I've started noticing some definite "dead zones" – areas with very little to no active oil and gas development. This got me thinking about OGM (Oil, Gas, and Mineral) rights.

1. Does the lack of active O&G activity in these dead zones potentially affect the value or validity of the OGM rights within those pockets?
2. If it does, is there a publicly accessible website or resource that provides detailed mapping of active gas pooling areas within Susquehanna County? I'm aware that Clifford Township, in the southeast corner, has historically had lower quality gas and subsequently lower OGM rights values.

Any insights or experiences you can share would be extremely helpful. Thanks in advance!

 

[Terrel L. Shields]

Does the lack of active O&G activity in these dead zones potentially affect the value or validity of the OGM rights within those pockets?

Yes, radically at times. Far more fluid than surface. Check the courthouse for OG leases to gauge activity.

is there a publicly accessible website or resource that provides detailed mapping of active gas pooling areas within Susquehanna County?

PA Oil and Gas Mapping

Where activity was is less important than where it is going. I taught mineral rights for appraisers in Scranton, Mars, Williamsport, College station back 10 years ago. Robert Walker's school (Vintage RE in Hazelton) might still have some of the materials. I don't know. PM and I will send you more info.

Currently though - producing minerals are selling for about 3 times the annual income. Higher in "hot" new areas. Mineral deeds are recorded but I don't think deed stamps apply in Pennsylvania but if you can contact the sellers you might get them to disclose the price per acre offered for the minerals. Leases are generally going to be about one-third the price of the outright mineral purchase.

 

[TerryRohrer]

- producing minerals are selling for about 3 times the annual income. Leases are generally going to be about one-third the price of the outright mineral purchase.

Any regard for well life in these?

 

[Terrel L. Shields]

Any regard for well life in these?

If you are valuing the minerals, probably not. If you have access to an engineering report, they can develop a decline curve that predicts both life and remaining reserves and you can value the reserves in ground from sales. On large properties I get someone to do that. In small incomes, normally I look at the income over the previous 3 years. Some multiply the last years income by 3. One company I know offers 6x the last six months production and I have been offered from the previous 27 to 36 months income.

Well equipment is personal property of the operator. But there can be deeper or shallower zones with potential and that is where I can come in. But you have to consider if the lease releases undeveloped zones or holds everything by lease. Becomes more problematic at that point.

 

[Terrel L. Shields]

In PA, you might talk to an appraiser named Howard Mantle who is a mineral appraiser

HL Mantle Land Appraisal & Consulting PA NY NJ OH WV | HL Mantle Land Appraisal & Consulting PA

HL Mantle, Inc. is a full service real estate appraisal and consulting firm. We serve the states of Pennsylvania, New York, New Jersey, Ohio and West Virginia providing quality, accurate and timely appraisals.

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