Rhino Resource Partners LP Announces Mineral Lease Agreement
Rhino Resource Partners LP (NYSE: RNO) today announces a lease agreement with Chesapeake Exploration LLC for an estimated 1,500 acres the Partnership owns in the Utica Shale region in Harrison County Ohio. The lease agreement is for an initial five year term with an optional three year renewal period and conveys rights to Chesapeake to perform drilling and operating activities for producing oil, natural gas or other hydrocarbons. As part of the lease agreement, Chesapeake agreed to pay the Partnership the sum of $6,000 per acre as a lease bonus, or an estimated total of $9,000,000, of which $500,000 was paid at the signing of the lease agreement.
The remainder of the lease bonus payment shall be paid by Chesapeake to the Partnership within 90 days from the date the lease agreement was signed, subject to title verification of the acreage by Chesapeake. In addition, the lease agreement stipulates that Chesapeake shall pay the Partnership a 20% royalty based upon the gross proceeds received from the sale of oil and/or natural gas recovered from the leased property.
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