Add to that 5 year with 5 year extension. Also includes all oil/gas, etc, from top to
They will not budge.....
No business for them in Northern Butler county.
An article about Shell’s activity in the Pennsylvania Marcellus Shale, particularly along the western fringes of the Marcellus in Butler and Lawrence Counties (PA), reveals interesting insights about their strategy:
Shell plans to bring in a drill rig dedicated to the region next year. If things go well, it could add nine more. The company will spend two to four years determining how rich the land is with gas, and whether to drill here before tapping other oil and gas fields around the world, [Bill] Langin said.
Langin [a geologist] is in charge of Appalachian exploration for Royal Dutch Shell plc, which holds the mineral rights to about 100,000 acres in the two counties and more land in northern Pennsylvania.
Langin, 34, of Moon is not a wildcatter looking to drill in the sweetest spots he can find. His job is to drill in outlying areas, looking for data, zoning in on targets he cannot see. He asks: Where can Shell drill in its Appalachian holdings and profit?
Shell continues to lease land in Butler and Lawrence counties, adding about 30,000 acres to the 70,000 it bought from East last year, Langin said. Its big-picture exploration methods not only help the company gauge and manage holdings, but help its officials to decide where to lease land, said Badie Morsi, director of the University of Pittsburgh’s Petroleum Engineering Program.
It’s difficult to determine how much gas the Marcellus shale will produce in a given location. Pressure and natural fractures vary, Morsi said, meaning drillers can only approximate reserves.
"It’s very difficult to make generalizations," Morsi said. "It depends upon your luck. You’re shooting in the dark at 10,000 feet. It’s not a known thing where you go in and grab it."*
So why drill along the edges first, instead of in the middle of the “fairway”?
It’s common for multinational corporations such as Shell to take the time for advance work, Morsi said. If they drill edge areas first, the production there can indicate how much gas is inside the circle, he said.
That helps companies to plan efficiently for infrastructure costs, such as pipelines and compressor and processing stations, Langin said. They know the gas is there, but they must figure out how much is there and how hard it is to extract — then they can determine how high gas prices must be before drilling would be profitable.*
The article also mentions that Shell is targeting the Utica Shale layer as well
a 5 yr extension is not such a bad thing as long as the dollar amount for the extension is paid up front.
For example if you have 50 acres and lease at 3000 per acre you would receive $150k . Now if they have not held you land by production within 5 yrs they have the option for a 5 yr extension again at 3000 per acre for another $150k. Thats 300k in slightly over 5 years time. The extension is not that bad as long as they are paying the money to extend the lease up front.
This is just an example, I do agree 3k per is low.
What Shale gases are being included in the leases for Butler County?
Ground and below, Marcellus only, Marcellus and Utica!!
Just curious for what may come along.
Tomcat, your absolutely on the money! $1500 is a bargain for the gas company and they are on a run and grab mission to get this deal. The landowners who agree to these terms will most definitely be kicking themselves in 12 to 18 months when they see their neighbors sign for much more with better terms.
The other companies will create competion, just as we have seen in other areas and consequently the numbers will rise. Landowners need to be patient and join a landowner group to work together. The landmen love taking advantage of individual landowners by telling them "well you better sign now or we will just suck it our from under you" or even though they don't have a permit in the area yet, they will say "this is your last chance because we are drilling on your neighbors land".
Can you update us on the meeting Thursday. We are planning on driving out from Bradford County. Also just a thought, maybe we should open up to letting folks from some of the other townships join the group. I've read the posts here and I see some people are looking for groups. If they have no where to turn they are bound to signe eventually. I think the more acreage we hold the more bargaining power we have. Just a thought....