Replies to This Discussion

Permalink Reply by Mickgyver on October 29, 2011 at 1:37pm

Hello Mark ,

If you get into a large group they will have better power to negotiate a better lease . the changes allow for various protection and addendum's which protect the landowners from getting the short end of the stick .

Some leases will require a bit to hit the ground headed to drill a well by the end of the primary term.

If that is 5 years that will be the limitation. Year ago oil companies shad a few months to get the drilling statrted ,

in Texas they had a lot of leases that were only 3 years as the primary term . But in the current situation there is so much property they are requiring longer term leases to be able to get to drill them .

Go to a website and type in oil and gas terminology and it will help you with a lot of information .

 

 

• ▶ Reply

Permalink Reply by 2s72s0k9mm8gd on October 29, 2011 at 2:03pm

Maybe those of us fortunate enough to be where there is no "shallow gas" will be better off. How are they going to drill a "shallow well" (quickly drilled for cheap) and hold you by the production of air ?

• ▶ Reply

Permalink Reply by Bill anders on October 30, 2011 at 5:44pm

Glenn,

The well will not have to turn a profit.  If it is drilled, the lease is HBP.  They can drill a 500 ft. hole, and shut the well in.  Paying a shut in payment is less expensive than paying people $5,000/acre again.  

 

These are things that Bob Rae, ALOV, and all these others that you all have trusted w/ your lives do not understand.  Think for yourselves, or hire an attorney that does oil/gas work for a living.  There are none in OH, think about it...why would there be.  

Permalink Reply by ray schmidt on October 30, 2011 at 7:53pm

im in alov and im pretty sure this is addressed in our lease.they cannot just drill 500 ft and be hbp.ill check my lease to be sure but im 98% sure. i agee drill baby,bill needs to back off,bob did a great job for us!!

• ▶ Reply

Permalink Reply by Bill anders on October 31, 2011 at 2:37pm

We can revisit this topic in 2-4 years, and see how the tables turn and how excited you all are that you pooled together one of the largest landowner groups within the Utica and signed at $2250/17.5%.  

 

This was a pride thing for the board, and Bob.  The consulting they provided was poor to say the least, and if watching the mkt increase two-fold before most of these people have even been paid their $2250 is not a great job.  

 

That is my opinion, and this message board was created exactly for that reason.

 

I was not in ALOV, and it was one of the better decisions i have made.  I waited to see this unfold, and obviously made the right call.

• ▶ Reply

Permalink Reply by Ron Eiselstein on November 1, 2011 at 7:55am

Bill ,  What you are outlining is what many of us discussed on a previous popular post, "Why Landgroups fizzle Out."  My professional sentiments mirror yours, however the subject needs to expound further to describe that grouping land is most often required due to the individual size and nature of land.  That being said, landgrouping without competent leaders is definetly a bad business decission.

• ▶ Reply

Permalink Reply by Brett R Oxley on November 1, 2011 at 9:35am

Hey, Ron things are cracking over at the Geatches well again. lots of new "info" as usual all hearsay except physical sightings.

• ▶ Reply

Permalink Reply by Mickgyver on November 1, 2011 at 12:12pm

Hello Ron I enjoy the good posts you insert here ,keep them coming ,they make people think

I have been following a few of these posts about the alov group and their decisions 

Let's never forget the group members  made their own decisions and people had a choice to join or not to join and that was there own business  because they had to sign the agreements with their own future's in mind ,

The group itself was a tool that was offered to people who may not have known how to move forward on their own and this was a good start for many people to become more informed on what was transpiring in the areas as much as was possible at the time

Also the lease that was signed does have a lot of things that would be a good to have  in a lot of other leases which could never had been gotten especially if you sign on your own unless you have been given a lot of acres somewhere along the line .

Just from my general observations and talking to a lot of people ,most of the larger acre farms were available because they were mostly given to the families through the years and some had added as their farms expanded . 

In this day and age it is  very hard to have been able to buy a large amount of acres while raising a family so we must wish the best for all of those involved no matter how many acres they have and hope they made a good choice for their families .

I have looked at most of the leases that have been signed and I have also wondered why they may have agreed to certain things in the leases , but through my personal experience I know I have made mistakes in some areas ,and I have also made choices to give a little in one place to obtain something I thought may be better off in the long run later .

Since now we have time to look at what has passed before us ,we all can downplay everything that has gone on so far to a point ,but on the good side ,the Alov group needs commended

I really give credit to the folks in Pa. that first started the group concept and then the Alov group for getting the ball rolling here in Ohio ,

Ill bet you will find that most of the landrgroups that started  in Ohio have either seen the start of the ALov group in the paper or have contacted or at least investigated what the Alov group was doing ,

I  beieive they helped to spur the groups to begin and learn more as they went on ,and everyone has learned more of how this is playing out .

It is sad that a lot more information was not discovered earlier in the play since this discovery was a few years ago but this discovery was kept low key .The shale was known for years but the extraction methods were being used in Texas and canada as well as other places and it was no suggested here until they already had a good hold on the land in Ohio then the news finally leaked out a little here and there . 

In all situations everything is not perfect but the issue had to have a start someplace and I think the Alov group should get credit for inspiring the groups to grow as they have

.I am not even close to Columbiana county but I am absolutely certain the Alov group was inspirational in the price being raised as high as it is today so far .at least here in Belmont County which had the $4950 and 19% with the Colrein Ohio Group.

Just to put the Alov lease into perspective here is what happened to me . I was offered $5000 and 20% and I had to take the company lease . When I said I wanted to just have my lease say from the top of the MArcellus to below the Utica point Pleasant , I was told no way my comapny wants full control from top to bottom they wont do this.

A friend of mine was in the same boat and said the same thing except he told them , I know that the Alov group signed with a lease that had the limitation stated from the top of the Queenston shale and below the utica .

I was told they could not change the company lease but since my friend new about the Alov lease he told him about it . Then the landman that said he could not change the lease suddenly told him yeah ok ill let you have a lease like the Alov lease but you will only get $2700 like they did  ,and not the $5000 I offered you .

Actually I think they got a little less than the $2700 I believe it was $2250 an acre ,but that is what he told my friend .

The point is that this landman new their lease was much better than the normal company lease and he would not give the same money if my friend wanted the better lease clauses .

I guess the point is that we may have to give up some upfront money but we will get a better lease with protection for our land and the future generations that may have to deal with our decisions .

This is a time to wish the best for everyone and hopefully there are no personal grudges taken out on this site .

I want to learn as much as I can and give best wishes to all those that have signed already with hopes that any shortcomings at the start will be surpassed as time goes on .

I don't like to throw ice on the fire but the sad fact is we could all sign for $30k and 27% but how many of us will have properties without enough to keep us in a unit ,or even get put into a unit in the first place as far as that goes .

When the lease's all allow for the unit size to be changed at any time this would certainly be a convenient way to eliminate payments to those that have little production coming from their actual acres .

There are many clauses that control us as landowners , we must never forget they have lawyers second to none when it comes to writing these leases .What we read as one thing has a completely different meaning in some cases . The legal Jargon is meant to be this way

Unless the Addendum's over ride every detail of the company leases there will be some things that can hurt us as time passes on ,

I don't believe these large corporations will let any leases fully control the outcome of their business since this is their venture .

We may be partner's but unless we take solid control of where we are headed we will become silent partner's more than we want to .

Even the royalties can be controlled if the prices are regulated by the average price from the field ,especially if one company owns all of the local field production.

With all of the clauses and controls they will have ,that is why I wish the best for my friends and neighbors in all counties .

We do not have the proper ammunition in this battle without having the testing results to be sure what is under our own properties .

I believe that is our worst enemy in not getting the prices of the bonus money to move any quicker than they are .

The only other strength we have is in numbers ,and the large plots of land that combined numbers of neighbors have . 

Since the companies are the only ones that have the money and equipment to knowwhat we have and they are not telling, we are somewhat limited on getting our best demands full filled 

Lets try to help each other with whatever information we can pass on to each other to help those that have not signed lease's yet to learn form the mistakes that may have occurred so far . We don't want to sign over our land to foreign entities any more than we have already done  wih the fact that the banks are over 80% owned with foreign control and the stock market is also controlled heavily with foreign investment .

Best wishes to all that have gone ahead of us and to those with their future decisions still ahead  Mick.

• ▶ Reply

Permalink Reply by dr j on November 1, 2011 at 1:01pm

Bill, 

 

Good on you buddy.  But let me submit this for you to chew on..... since you are a long term thinker and all -  The bonus is really "just" that, a bonus.  As has been pointed out continually it should not be the point of your focus what so ever.   As this whole situation has evolved over the last year it was continually mentioned that the "real" money is in royalties i.e.  signing at 2250 or 1500 for that matter was a win/win BECAUSE if the play is real, if this "is what they think it is" the 2250/1500 for most landowners is going to be pocket change.  But if for whatever reason the play does not move forward and drilling does not go forth,  the bonuses will disappear, no one gets royalties and those who signed early for whatever the (decent) price are the ones who made the smart decision.   If the bonus goes up astronomically, as it appears to be doing, so much the better- it confirms what has been hinted at..... it's here, it's lucrative and for most smaller landowners ( most of us) any royalty income will quickly make for money left "on the table" at the bonus end.   I know some landowners with big acreage who signed at 1500.  They are fine with it.   They have enough land to be a unit unto themselves.   If/when they are drilled and if the well produces even moderately ( not even close to the levels of Carroll/Harrison wells)- they will make up the difference in 6-12 months - much more quickly if the wells are better than average.  On the other hand if the whole shooting match would have gone away, they still would have been sitting on a 7 figure check which I am sure was utilized to retire debt, make improvements and generally make their lives better.   My favorite saying as of late is "pigs get fat, hogs get slaughtered".

 

The point is, guilty as we all are, this is not the about nor should it ever be about, the bonus money.   It's just the only way the oil and gas companies have to get us to pay attention.     

• ▶ Reply

Permalink Reply by Brett R Oxley on November 2, 2011 at 8:23am

Amen. +1000% agree.

• ▶ Reply

Permalink Reply by Blue Sky on November 2, 2011 at 11:41am

Thanks for summing it up so nicely.  I couldn't agree more.

• ▶ Reply

Permalink Reply by Bill anders on November 2, 2011 at 1:11pm

I am confused.  So you are saying having a 80,000 acre group sign at $2250 when offers kept going up was a "good"decision?  Each and every one of those property owners left a minimum of $2250 on the table.  Those of us who did wait got the exact language they did, same royalty, and an additional $2250/Acre.  

 

My point was that the landowner groups turn into a pride deal.  They send their package off for bid, with no idea of where the market is, or is going.  I just do not understand how having a corn trader, and a local attorney consult that many people on a subject they know nothing about could be viewed as "great work."  

 

For those that signed early on their own accord, I understand that.  Each property owner has specific issues they need to address, a timeframe, and a dollar figure that makes them happy.  

 

These "oil/gas consultants" have now begun their own "for-profit" group doing the same thing in the area.  They are boasting at what they have accomplished thus far in their short oil/gas career.  I am simply highlighting what they actually have done.  

 

When they are taking a fee, a %, or getting a kickback from the companies that now love them since they gave them a 50% discount on half the Utica, they don't sit as a "friendly neighbor" in my book.  They are now landmen themselves, the people they told me not to trust.   

• ▶ Reply

• ‹ Previous
• 1
• …
• 3
• 4
• 5
• 6
• 7
• Next ›
• Page