Not necessarily. It all depends on the lease wording. A good (landowner friendly) lease would define a bit in the ground to hold a lease. I've seen some crappy (for the landowner) leases that define "site preparation" as an intent to drill and therefore HBP. There are companies in PA who have moved a dozer in and started grading an access road (and nothing else) in an attempt to retain expiring leases. Unless you know the exact lease wording, this is all speculation.
A lease can be held with NO drilling done. The determining factor is the lease wording. If you want a well on your property that reaches down and produces from the "deep" stuff in your lifetime, WITHOUT the company's expenses being taken from the royalty % before you ever see a penny, then the lease document better spell that all out. Willing for well pad to be placed on your land? Then be sure the lease says directional drilling will be done and you will receive a royalty payment on each on well ... specify the shale layers by name and depth, and the time frame that this must be accomplished in. Failure to meet that time frame releases them and you from the lease agreement, but does allow both of you to negotiate another deal. That way both sides have control and opportunity.
Simply agreeing to drilling "X" # of wells allows a company to turn your land into a piece of Swiss cheese with little to show for what you gave up, and an environmental mess. Get with a solid group that has experienced and tech savvy representation in the negotiation ring.
Say "No!" to a Frac Pond. Request a closed-loop system for deep soil and frac fluid removal. This is not the moon and the stars. It's what other areas are getting. Good luck.
Say "NO" to all of it. Too many people are regretting ever leasing.
Read the following: http://www.nytimes.com/2011/09/23/nyregion/hydrofracking-leases-sub...
Folks across OH would be wise to slow down on the signing. The rush is hitting you because your area is hot, and companies want to sign up as much acreage ASAP before everyone knows exactly how they operate ... and owners know exactly what they have. Action like this happened east of you in PA (and is sometimes repeated on the unwary), but Groups have become the way to go if you can find experienced professionals to represent you. Think "strength in numbers" and individuals won't be picked off like fish in a barrel. A top-notch company will represent land/rights owners on a contingency fee basis. They don't get paid unless you get paid. That's a BIG incentive to get owners the best deal possible!
While there must surely be some Groups put together, the top one I'm aware of right now is Penn-Ohio... obviously in both states. Do some more homework, and when it comes to lease language watch out for words like "intent", "capable of" , and the ever popular "preparing". They are often found in Industry-friendly Leases. Not good. Held by production should refer to a substance being removed from the ground in the shale formation designated in the lease. Specific depth ranges should be listed. As for water pits and places where the earth dredged up from holes1,000's of feet down can be dumped ... you don't want them! In PA closed-loop systems are being used very successfully. Companies can and are doing this in other areas, why not where you are? It saves a mess and is an environmentally safe way to get the stuff away from you. This is the beginning of "leasing/drilling 101". GET A GROUP GOING!
Good luck! [email protected]
Steve, I spent the day two days ago with people who are surrounded by about 7 wells and a couple frack ponds. These people are sick, they cannot go outside without being affected from air pollution. Their homes are worth nothing because the water is ruined. I can go on and on and on....
a suggestion would be to go on Youtube and type in "natural gas Bradford" and watch a few videos...