Replies to This Discussion

Permalink Reply by Steve AC on January 14, 2011 at 12:09am

Awesome checklist VG! If your potential attorney can't succinctly explain any of these terms, then find someone who can. Otherwise you pay for their education (and mistakes).For those of you who don't have attorneys because they "cost too much" consider what it could cost if one of these clauses comes into affect and you aren't covered. I'm not an attorney, but I have one and less than 20 acres. Thanks VG!

Permalink Reply by Bob Brown on February 4, 2011 at 2:16pm

We are in the Coveytown area, and I can tell you this:

A pipeline agent just left my home, we are close to signing a pipeline lease.

Our original gas lease is/was with Chief.

A driveway agent is hot on our trail.

There is a well permitted to begin as soon as they get the driveway built about 500 feet behind my house, by Chesapeake.

Both agents have told me, "They wouldn't be pushing so hard on this particular well if they did not have the rights. Essentially saying (but always not saying) that Chesapeake has either bought or sub-leased our contract.

Looking at a Chesapeake larger map of planned wells, there are a few "black spots" that are a combination of heavily chief leased and "never-going-to-do-it" landowners.

Hope this helps.

 

Permalink Reply by John Yonkin on February 4, 2011 at 2:34pm

Bob, be very careful with any pipeline agreement.  Be sure you understand how many pipes, gas, water ect will be allowed on the right of way.  If you are dealing with AMS regarding the pipeline I would be particularly careful.

 

As I mentioned previously.  CHK and Chief have an agreement to work together to develop Sullivan County.  This does not mean that Chief will not eventually sell their holdings(leases, wells, ect) in the future.  That is clearly their business model.

 

J Yonkin

Permalink Reply by John Yonkin on February 4, 2011 at 2:48pm

One other thing to consider when discussing a pipeline ROW.  Ch 16 did a story a few days ago where they interviewed a land owner who had just signed a ROW with Laser Midstream (Laser also develops gathering lines for CHK and other gas companies)  The landowner was quoted as saying the agreement was for $55 a foot.  The last I knew AMS was offering $6500 a disturbed acre and that equals about $15 a ft.  Remember the ROW company is not interested in making a good deal for you the land owner.

 

J Yonkin

Permalink Reply by Bob Brown on February 4, 2011 at 2:57pm

55 dollars a foot!!??!! That sounds pretty out there to me...

 

I have been going back and forth with our pipeline person since Thanksgiving. We are up to 7 pages of addenda. Still not quite ready to pull the trigger. Water line states ONE FRESH and only fresh water line. The single gas line is to be 24" Any above ground water lines will require a seperate lease agreement.

 

Lots of down the road liability stuff - it's all theirs now as well as when it is no longer useful.

 

Yes, 6500 is the best they seem to want to do, works out to 14.95 or so a foot.

 

Permalink Reply by Bob Brown on February 4, 2011 at 7:51pm

VG,

I've been reading, watching these threads for the last 4 or 5 months, have info printed from both of your links.

 

I am part of a land group, with a lawyer on retainer. Each time the land agent comes to visit, we send her home with homework. It has been a good exchange. The original single page of addenda has grown through our conversation to more than 7.

I am  also not anti-gas, nor am I stumbling blindly.

The fact remains that it is here, the wells are going in, no gas gets sold without a pipeline. I am sick and tired of sending my gas money overseas to countries who don't like us in thef irst place.

Today's news speaks of power outages in Texas and New Mexico because of natural gas shortages!! In Texas!

With eyes wide open, we need to assert ourselves and be part of the solution.

Bob

 

Permalink Reply by FXEF on February 4, 2011 at 8:24pm

Bob,

"Today's news speaks of power outages in Texas and New Mexico because of natural gas shortages!! In Texas!"

 

This is bad news reporting. Texas does not have a natural gas shortage. The southern part of the US is experiencing below normal temperatures and as a result the gas usage is exceeding the distribution capabilities.  

Permalink Reply by John Yonkin on February 4, 2011 at 4:45pm

What is the definition of "fresh" water?  

 

J Yonkin

Permalink Reply by John Yonkin on February 4, 2011 at 7:26pm

Well for example..... "fresh" water could be water from our faucet.... "fresh" water could be from a stream or pond.... "fresh" water could be water with salt: "fresh salt water".... "fresh"  water could be water "freshly" removed from the ground, as in from a "well".  Water freshly removed from a gas well could be "fresh" water.   Be very careful... do not assume what the definition is of any key issue in a written agreement.

 

Consider also the definition of "completed" as in ....When the ROW is completed.  When exactly is that?   Your definition of "completed" and the gas line company will not likely be the same.  (remember most ROW proposals are paid on "completion" so it would be good to know exactly when this occurs)

 

Why wouldn't you ask for $6500 per disturbed per pipe on the pipeline? 

 

Finally, be sure to specifically note in the agreement by detailed drawing and surveyor documentation the exact path of the proposed ROW.  Do not accept anything else, especially when the land man tells you "don't worry we don't work that way."   In the end when you have a problem the Judge you are asking for help can only read the agreement and base any ruling on it, not what any land man said.

 

Just in case you wonder...I am not anti-gas wells or ROWs.  I support the development of Marcellus shale as a national resource.   I am very anti-land men who come here and attempt to mislead, deceive, or even lie to landowners in order to get what they want for their company.  I also believe that business deals should be win-win for both sides not "I win, you loose" 

 

There is no reason to rush into a ROW agreement.  Time is on your side. 

 

Negotiate everything!

 

J Yonkin

Permalink Reply by Bob Brown on February 4, 2011 at 7:46pm

John,

If you are asking me ,"Why wouldn't you ask for $6500 per disturbed per pipe on the pipeline? "

 

This is exactly what they are offering, it works out to $14.95/foot.

Bob

 

Permalink Reply by Bob Brown on February 4, 2011 at 7:57pm

Fresh water by any sane public utility definition is just that - fresh water. Not treated, not adulterated, not adulterated, not salted. Last I looked, there is very little fresh salt water - maybe a couple random deep salt water wells drilled by accident... I know if one in Forks township not too far from the township building, but that isn't fresh water either.

 

My addendum states that payment must be within 60 days of the start of operations on my property. Done or not. The ground must be returned to its original state within 6 months of the start.

Bob

 

Permalink Reply by John Yonkin on February 4, 2011 at 9:50pm

So you are in fact getting $13000 per disturbed acre?  $6500 per acre PER Each pipe?   If not why is the water pipe FREE?

 

You confirm my point about "fresh" water.  You have a definition and I guarantee the gas line company will have a slightly different one.  That is why you should have a clear definition of key items in your agreement.   I have already heard gas workers talking about "fresh salt water".   You might want to speak with a DEP representative and ask what their definition of fresh water is. 

You stated: "My addendum states that payment must be within 60 days of the start of operations on my property."   Is that the exact wording in your addendum?  "start of operations"?   If so then what does "start of operations" mean?  Start of surveying?  Start of Digging?  Start of bed preparation?  Start of pipe laying?  Start of burying pipe?  or perhaps Start of gas flow?  My guess is the gas line company would say ....Start of gas flow because that is when operation of production starts.   I am not trying to be difficult but it is clear that land men have much more experience then most of us when it comes to agreements and addendum.  We are playing poker with their deck of cards and they are very crafty at dealing.

 

Be smart and be careful

 

J Yonkin

 

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