Recent Offers in the Marcellus Shale

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2. Lease Bonus Offer
3. Royalty %
4. Terms (length of the lease)

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Permalink Reply by Sharon Yingling on July 28, 2009 at 2:47pm
1. PA
2. Clearfield
3. $750.00 an acre
4. 12.5%
5. 60 months
Was offered $750 and acre last fall. Took the lease to my attorney. My attorney contacted the oil and gas company and they never responded. Now hearing rumors that they want to re-negotiate. $500 an acre. We will not sign for anything less than what we agreed upon last year. May we will just sit and wait it out until gas prices go back up.
Permalink Reply by bob on March 10, 2010 at 2:18am
Can anyone explain briefly if the rule of capture would allow a driller on leased property adjoining non leased property to extract minerals from beneath the non leased property either by means of horizontal drilling or perhaps by natural pressure? Anyone
Permalink Reply by tg mott on March 13, 2010 at 3:46pm
Hi, As I understand in (PA) that product what comes out of the pipe is owned by the well owner.
Now as to fracking that well is uncontrolled and Law of capture applies in vertical wells,
that is settled law.
What has not been settled (check with a attorny) is HORZ. drilling and "controlled drilling" into adjacent property with fracing of the horz well with out a lease agreement for this nonleased property intrusion.
Permalink Reply by Bryan D. Huwar on November 17, 2010 at 12:16am
A company drilling on a leased property can drill right up to the boundary of the unleased property and any gas that naturally migrates off of the unleased property and is then captured on the leased property is the company's property. However, the company cannot actually drill onto the unleased property in order to extract the gas. As far as I understand Texas law (which I don't practice) a frac on the lease property may legally run onto the unleased property without being a violation of the unleased property owner's rights. This is likely the way Pennsylvania law will be heading - but that's just a guess.
Permalink Reply by Sam Douglass on November 17, 2010 at 8:41am
You may be right. But Pennsylvania is a different state court from Texas and could reach a different result.

The question for the court will be can you set off a bomb on one property that affects another property without liability [slightly overstated].

In Pennsylvania [and maybe all states] there is absolute liability for blasting if you damage your neighbor's property. Strip miners, for instance, have had to be cognizant of the affects of their blasting. Fracking is a form of blasting.

To my knowledge, Texas is the only state whose courts have looked at the issue; do not count on them all to look at things the way Texans do.

Even if they frack along the property line, it is doubtful that gas will be drawn from more than 300 feet away. The Marcellus is a tight formation. And it will be highly unusual in the way drilling patterns are laid out that a pipe can will be laid along a property line. More often the pipe is likely to come close to a corner. The horizontal drilling is in straight parallel lines about 500 feet apart in a direction dictated by the natural fracking caused by nature.
Permalink Reply by Alan Coogan on November 17, 2010 at 5:39pm
The comment by Mr Huwar essentially covers the same question as posed in Ohio, except that Ohio has surface set-back (spacing) requirements. Spacing rules apply above the ground, the rule of capture applies below the ground. The rule is based on an early 20th century Ohio case that went to Ohio and U.S. Supreme courts. It was the common law long before then. The recent Ohio case that applies more or less to
the "off lease" fracture is Chance vs. BP Chemicals, a Class I injection well case.
There, underground trespass is recognized, but damages must be proven.

Alan Coogan. attorney and Registered geologist in Pa.
Permalink Reply by Michael Mclaughlin on November 17, 2010 at 5:57pm
In the Haynesville in East Texas, companies must stay at least 330' from unleased property lines with their horizontal drilling. It is true that the law of capture applies and all oil and gas migrating to a legally drilled well-bore belongs to the company drilling it subject to the terms of their leases and assignments thereof.
Permalink Reply by Frank Walker on November 22, 2010 at 6:45pm
Brian the case in Texas was the famous Coastal v. Garza decision rendered by the Texas Supreme Court. It went against landowners which is the reason I, a PA landowner, am aware of it. We fear the possible (albeit out of state) precedent.

It is key, however, to acknowledge the differences between TX and PA and the implications of those differences. It goes to what you correctly wrote about the zero setback for Marcellus drilling in PA. This is NOT the same in TX, a pivotal fact I'm confident their Supreme Court took into consideration. Distilled down to the essentials, here it is:

Yes, it is legal in TX to frac unleased land. But however, the driller doing this must stand back with its well bore a minimum of 330 feet from the property boundary.

So if the PA Supreme Court, should they ever get 'round to ruling on this, allow fracking of unleased shale beneath our current law of zero setback, they would be legalizing theft of gas straight up. I doubt they would be sufficiently insane to do so.

But of course, you never know.

I admire the wisdom of Garza. The Texas Court needed to balance two conflicting imperatives:

1. Any Lessee should be entitled to frac 100% of its leased shale.

2. Unleased landowners are entitled to have their shale safeguarded against uninvited, unwanted fracking, and the huge monetary losses which would ensue.

It's my view the TX court reached a Solomon-like decision, allowing incidental fracking while, thanks to the existing TX setback, protecting the unleased from aggressive boundary line fracking, aka, theft.
Permalink Reply by JK on December 2, 2010 at 7:28pm
IS this the case in WV also?
If we have 10 wells and 3 still producing, can or will they drill for Marcellus?
I've learned they can open dead wells back up for this.
Permalink Reply by Frank Walker on November 22, 2010 at 7:05pm
I am posting on this separate from my Garza response because the concept here goes more to "Rule of Capture" than to Garza and much more to PA than to TX:

Common with Garza, though, the focus here is frac trespass:

Our Rule of Capture has its roots deep in the history of our jurisprudence. Early on, the issues were concerning water wells and not oil or gas wells. There are worrying (for landowners) precedents which stem from the history of this rule.

Stated as generally as I'm able, is it legal beneath the Rule of Capture for one landowner, or its Lessee, to send waves of energy into and onto a neighbor's land and benefit from so doing? It is understood the source of the energy is located off, outside of, the neighbor's (unleased) land.

My personal view is that doing anything like that is patently wrong and unlawful, and is a blatant trespass. But I'm not King.

Rule of Capture history offers a far more worrying precedent, from the world of water wells. In the "old days" it was commonplace to enhance water wells by detonating dynamite at (albeit shallow) depths down inside the well. Doing this was legal and accepted. It goes without saying the energy from such blasts reached across property lines.

I've no way to know whether the PA Supreme Court, should they ever rule on frac trespass, will take the old dynamite thing into account. I surely hope they do not.
Permalink Reply by Joseph Bongiorni on November 6, 2009 at 11:28am
I'd sit out. I'm sorry I signed for what I did.Main thing is Be specific in agreement. Percentages at 20 here. Not what I got.But!! If you can hold out. An article I read stated that they could make money at $1.16 per plus the 10 or 12 cent delivery Charge.
Permalink Reply by Tyler Courtney on July 26, 2010 at 9:12pm
This sounds awfully low. What township? Are there any particulars in your lease that may cause the offers to be lower?

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