By Alexandra Smith
HERMITAGE, Pa. – Leasing company Co-eXprise is assisting in negotiating Marcellus and Utica shale leases for hundreds of Mercer County landowners in the Penn-Ohio group by helping to arrange leases with drilling companies.
Property owners showed up at the Hermitage Veterans of Foreign Wars building on Thursday, Nov. 10 for a mass lease-signing. Some of the landowners decided to join the newly created Penn-Ohio group that was organized for the occasion.
Chris Cracraft and Bill Smith, sales directors of Co-eXprise Inc., spoke at the event and acted for the landowners to help negotiate leases with the Hilcorp drilling company, an operator that is a competitor to gas companies such as Shell Oil, Chesapeake Appalachia, and Chevron.
“The deal will provide them with a $3,000 gross per acre bonus payment, plus the landowners will share a 17 percent gross royalty payment,” Smith said of the arrangement.
The drilling company pays the bonus for the rights to hold the property under lease for a specified period.
For the Penn-Ohio group, the lease is five years with a five year option to renew.
If the company drills a well during the lease period, the landowners will share 17 percent of the value on whatever comes up in the way of gas, oil or constituents of the fuel, pro rated based on their acreage. It doesn’t matter where the production comes from in the unit; all the landowners are in a pool.
In a typical lease, 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 right of the landowners gives the company an incentive to be extremely accurate in their payouts.
Co-eXprise’s fee is going to be anywhere from $150 to $240 of each $3,000 per acre received by the landowners, depending on their specific contract. If the landowners sign up, they acquire 95 percent of the bonus money Co-eXprise earns.
More than 460 people showed up for the signup when word about the leasing terms spread among the landowners, according to Smith, also a Pennsylvania resident.
An anonymous landowner voiced his opinion during the meeting, “We don’t know you and this seems too good to be true, how do we know that you guys are legitimate?”
Smith replied to the landowner by stating that Co-eXprise would be willing to give references of current customers so that the landowners could make their own judgments about the company.
Co-eXprise processed the leases, which represent 400 acres, and put all of the information into their GIS mapping system, a tool they developed to show where all the landowner’s parcels are located on a map. The company uses it in reference of recruiting and leasing acreage.
The Mercer county area alone contains 5,000 acres that are already signed up to participate in the process, Smith said, but not all have signed leases.
Co-eXprise is an oil and gas company that reaches out to about 180 different drilling companies to find the best leasing offer for landowners.
“We are here to represent the landowners, not the oil and gas companies,” Cracraft explained. “We want them to get a better deal in monetary and leasing terms, so they don’t get taken advantage of.”
The company is looking to help landowners who own one or more acres to lease.
Mercer County is made up of 430,080 acres and some of those acres have already been leased to Atlas, a drilling company who made deals with landowners in the 1990s. The landowners under contracts with Atlas are unable to sign with Co-eXprise.
People whose properties qualify for leasing on those terms can still get a leasing deal by calling Co-eXprise.
So far, landowners from nine of the 48 municipalities of Mercer County are involved as well as five in Beaver County and 20 from Lawrence County.