All things pertaining to the Marcellus & Utica Shale
Oil & Gas Leasing 101
1. The oil & gas lease is a binding contract, it is not a purchase agreement that you can get out of after three days. The terms of this lease will last beyond your lifetime and affect the lives of your children and grand children. It is not to a contract to be entered into on a whim or for quick up front money.
2. The landman is not your friend, he works for and is paid by the oil & gas company. He/she is paid to look out for the interests of the oil & gas company not yours. Don't believe anything a landman tells you, it won't be in the lease you sign.
3. Leases are very complicated chances are you won't understand some or all of the clauses in the lease , so why would you sign it ? GET an OIL & GAS ATTORNEY ! It will be money well spent. Or if you really can't afford an attorney find a landowners group with legal representation.
4. Even if you have an attorney or belong to a landowner group you should become educated about the lease. Don't sign a lease if you don't understand it, even if you have representation.
Those are my basic thoughts I will now open the discussion to the rest of the class.
Mark
Views: 2515
Replies to This Discussion
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Permalink Reply by Ridgeman on -
No Billy , I own the wells completely . It sounds like that the previous owners of there wells dumped the wells thus saving the liability , the plugging and or the operating costs .
This brings up a interesting question , anyone considering buying a well from some one for the purposes other than domestic gas should beware unless they give all of the mineral rights , the problem being the older shallow well don't have the psi to get in to the new psi that will be in the 600 to 700 + range .
This will really present some problems that will require compressing the gas just to get into the high pressure lines driven by the Utica or Marcellus .
If they assumed the well or wells just for domestic purposes this is a none issue but rather a blessing .
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Permalink Reply by Ridgeman on
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Another thought , I f anyone is considering buying some ones production make sure that you put a clause in the lease that you will not be responsible for any pollution that had been caused by anyone before you assumed the well .
This one could bankrupt you !
Hope this helps .
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Permalink Reply by Billy Park Whyde on -
I was looking at the Muskingum County Recorders office and was looking around. Some of you may have heard of the Bruner Land Company, ya know the ones that send ya those post cards. Well I put it into the simple search and saw where in one sale the sold over 8,134 acres of oil related comodities such as leases , oil wells ect to North Coast Energy . I also found where Energy Exploration did the same with 5,534 acres.
North Coast Energy is now Exco. 13,000 acres isn't a bad start
http://www.excoresources.com/appalachia.htm
"During 2009, we focused on testing and evaluating our Marcellus fairway acreage, which we define as being geologically over-pressured. Approximately 60% of our Marcellus shale fairway acreage is held by shallow production." hmmm
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Permalink Reply by Ridgeman on
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That's funny you bring this up Billy , A friend of mine was talking about this months ago how Bruner was going to be a billionaire from reserving all of the minerals from land sold .
The part that really bothers me is so many good folks bought what the thought was there little piece Heaven here on earth and are about to find out how this really works .
Originally being from the Northern part of the state we all wanted a piece of what the lucky southern folks had down here .
So many paid way more for land than it was worth driving the prices up for the locals , good or bad ,
put up cabins or built homes for retirement and are going to find out that they could have a well pad or worst yet a compressor within 500 - 700 feet from there structure with no royalty or signing bonus .That really sucks .
I'll bet the owner of the land company wont be running for Mayor !
What a bummer .
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Permalink Reply by Sarah on
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If you do know the mineral rights are not included with the land, how do you supply information to the seller that it is worth less? Is that your responsibility or theirs?
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Permalink Reply by Mike h on -
You can mention it in your offer to them or else explain it verbally in conjunction with your written offer.
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Permalink Reply by Billy Park Whyde on
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Land is never worthless. Point a strip mine pit has value to it. you can charge NY to dump their trash in it. design it for methane gas extraction (Waste Management has done this) Buy the time the gas wells deplete you can have Christmas trees for sale. Telephone pole trees so there is no such thing as land without value but I think I'll pass on Iran with Israel getting bent out of shape.
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Permalink Reply by Ridgeman on
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If you are referring to me Billy on the land I never said that the land is worthless , I agree with you .
What did you mean with the Iran - Israel thing ? Did I miss something .
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Permalink Reply by Billy Park Whyde on
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I was replying to Sarah's post. The nice thing I see is the Bruner deal was done in 2005 ha ha ha so they don't get the chance to further pillage.
The Iran was in case Israel has to modify the landscape there!
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Permalink Reply by Finnbear on
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Bruner has sold a lot of land since 2005 (and kept the minerals on most of it).
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Permalink Reply by Ridgeman on
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My opinion is yes it should be disclosed to avoid future problems .Something like the buyer understands that the minerals have been reserved . I know on the deed this is there not sure on the purchase agreement .
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