All things pertaining to the Marcellus & Utica Shale

how do you find out who is in a unit?

Hello list, i own land in Northern Lycoming county. My neighbor just had a well pad drilled, no pipeline yet in this area. My lease comes up again this summer. I am currently signed with a different company than my neighbor. Do i need to go to the courthouse to find out if my property is included in his unit? If it is, then would i then need to try to sign my new lease with the same company? I also own some property in Bradford county (only 11 acres) and we are a "donut hole" in the middle of a producing unit, but are signed with a different company and we are getting zero royalties. It seems rather unfair and i don't want to get in the same situation again. I really feel as if i don't know much about this and appreciate the education this list gives, thanks in advance, Sean

Replies to This Discussion

Permalink Reply by Ellen Burkey on March 29, 2011 at 10:21am

Sean,

If you are a donut hole in a producing unit, you are entitled to royalties that are taken from your mineral rights. You need to contact the company that holds your lease as well as the company who is currently drilling to see the proudtion unit plans and where the well is drilled. If the well is under your land you are entitled to royalties.

Permalink Reply by Sean on March 29, 2011 at 6:57pm

Thankyou Ellen for your reply, the unit is with Talisman and our property is signed with Chief. We talked to people from Chief and were told there was nothing we could do about it. We also talked to a lawyer in Bradford Co. and were told there was nothing we could do about it. Maybe we are talking to the wrong people?! Sean

Permalink Reply by FXEF on March 29, 2011 at 10:38pm

Sean,

If Talisman hold the unit orders and is the operator and Chief owns a lease within the unit, then Talisman will pay Chief their share and Chief will pay the pooled royalty owners.

Permalink Reply by BuckinghamGasMan on March 30, 2011 at 9:05am

Sean,

I'm guessing that the lines go all around you, but not under you. If they don't go under you, I think the law is that they are not extracting your gas. Chief should really have traded your lease with Talisman. Maybe you can get out of the lease and then sign with Talisman?

Permalink Reply by Sean on March 30, 2011 at 9:07am

BuckinghamGasMan, how do you find out where the lines go? Is that public information? Thankyou for your help. Our lease with Chief does not run out for 2 more years. seanna

Permalink Reply by NY Gas Rights on May 25, 2011 at 1:42am

Wrong Buckingham. If your land is included in a unit AND you have a lease, it makes NO difference where the bore holes are. You are entitled to royalties for every acre included and declared in the unit. You own your mineral rights, but you must be an operator of your minerals to protect your interest. A lease is "leasing" your rights as an operator to the gas company who you have an agreement with. A unit is declared and all gas extracted from that unit is shared and paid to ALL operators. An unleased parcel is not controlled by an operator and so the Rule of Capture applies for the Marcellus and shallower formations. However, an unleased parcel can not be drilled under (trespassing), but can be drilled next to and fracked (hence the rule of capture).

Permalink Reply by BuckinghamGasMan on July 12, 2011 at 9:31am

I see that your moniker is NY Gas Rights. Pa does not have forced unitization (I believe that NY does). Is it possible that the rules you cite are NY rules and not PA rules? I very well could be wrong since I am not a lawyer (as though that's a guarantee), but proposed legislation has been written which would indicate that the rule suggest is not in force in Pa. Is it possible that a unit can be set up that leaves a doughnut hole in the middle, since the unit does not have to be a square unit.

Permalink Reply by Harvey Follmer III on March 29, 2011 at 11:03am

Don't know about different gas company, but the units are a legal doc and are filed in the court house with your lease if you are in one.

Permalink Reply by scott brion on March 29, 2011 at 6:35pm

Hi Sean,

I live in buttonwood and am pretty familiar ( I spend too much time in the courthouse....) with all the units here. If you can provide some detail or the unit you think you will be part of I can try and get you some information or tell you how to find it.

Permalink Reply by Ron Griz on March 30, 2011 at 11:24am

You can go to the state Efacts web site http://www.ahs2.dep.state.pa.us/eFactsWeb/default.aspx and find the permit # for the wells in your area, then call Katie Schmid| Geologic Scientist, Carbon Sequestration Section
Bureau of Topographic & Geologic Survey
400 Waterfront Drive | Pittsburgh, PA 15222-4745
Phone: 412-442-4232 | Fax: 412-442-4298

and ask her to send you a Plat plan for the well. This will show if they are going under your property. If they are going under your property (, or within ???300??? yds- not sure how close) then your should be in a unit.

Permalink Reply by scott brion on March 30, 2011 at 2:47pm

Sean,

Shell (formerly East) will file a Declaration of Pooling and Unitization in the Lycoming county courthouse. The document will have a map of the drilling unit and an exhibit that lists all the properties and leases included in the unit. Shell will typically send a copy of the document to all the affected landowners when they record it. Unfortunately the only way I know to get the document is to visit the courthouse.

As to Chief/ Talisman, I know of other landowners in Bradford county in the same situation. It seems pretty unfair, but Chief and Talisman do not have to play together and there is no PA law to require them to treat you equitably. It is possible that Chief will trade or sell their lease to Talisman and they will add you to their unit, or you may have to wait until the end of your Chief lease. Once you are released, Talisman would likely lease you and add you to the unit.

The only other angle I can think of would be to request a release from Chief based on the fact they are not planning to develop your property. There is a concept of an implied covenant to to prudently operate your lease that may come into play, but it is a difficult argument to make successfully.

Good Luck!

Permalink Reply by NY Gas Rights on May 25, 2011 at 1:47am

Yes there is law that requires the companies to deal with each other; and there is Contract Law that protects the landowners. Most people in a unit, or bordering one, get a notice of water consumptive use required by the SRBC as their first indication of activity.