Massive Lease Signing in Ohio!

Residents from eight northeast Ohio counties, including Mahoning and Columbiana, lined up on Friday to lease their mineral rights to Chesapeake Energy.  But they're not coming in alone. They're part of a larger group, the Associated Landowners of the Ohio Valley.

Last year, ALOV formed to address residents safety and financial concerns over drilling the Marcellus Shale for natural gas.

"And you had people already studying the ins and outs of the things the average person doesn't have the time or where with all," said Columbiana county land owner, Curtis Frase.

"Well it certainly made it easy for us. These folks did all the research for us and just felt comfortable going with such a large group like this," said James Voorhes of East Liverpool.

And the group proved there is power in numbers.  In December, it reached an agreement with Chesapeake, which the residents believe goes above and beyond state law to protect their water supply and land.  They also say it was the best deal financially.

"We did it the right way. Sat down, took our time, submitted to 18 different companies, came up with the best one we feel," said Tim Duble.

The packed parking lot could be taken as a sign of the groups success. Between Friday and Saturday nearly 11 hundred leases will be signed.

The entire group is made up of about 2000 landowners, and represents more than 70,000 acres.

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Permalink Reply by Jim Litwinowicz on May 30, 2011 at 2:39pm
Hard to compare pricing,  Chief already has some producing wells, plus gathering lines.  Plus, these a company with producing wells already have done all the deed work, engineering, seismic, and more.  They usually have contracts with midstream pipelines and treatment plants to handle their produced gas.  All of this adds great value to the leases.  These sales also usually incluse some post sale partnership deals in further developing the play that also muddies the water.
Permalink Reply by Tinamarie S on May 6, 2011 at 10:24am

I am still trying to find a contact to sign a lease but I am not having any luck.   Anyone have a contact?  I am finding out that no new groups have formed.  

 

Permalink Reply by Tinamarie S on May 6, 2011 at 10:25am
Where is the next signing and who do you contact to sign?
Permalink Reply by Tinamarie S on May 6, 2011 at 7:45pm

Thanks Gregory,

How about a contact name of a representive?  

Permalink Reply by Jim Walters on May 28, 2011 at 7:27am

I'm not looking to argue (and won't) but I'm just wondering if all you guys knew that China is partnering with Chesapeake and already owns a huge stake in your land?

  http://marcellusdrilling.com/2011/04/foreign-investment-in-americas...

 

You know, (I live in a highly leased area) and this whole thing reminds me of the past when the anglo duped the American Indian out of their valuables by trading them trinkets, beads and junk . . . . only now the "trading post" is the local Walmart (do we really need the latest electronic trinket?) .......the only argument here seems to be "how much money am I going to get" . . . . . when to a lot of people this land may be the only thing you got. . . . . . .

Permalink Reply by John H on May 28, 2011 at 2:52pm
All you people expressing your elation that oil has been found should temper your enthusiasm with the following factual information.  They have been drilling Utica wells in Ohio for almost 15 years now.  Most, if not all, have showed intitial oil production, some as much as 1000 bbl per day or more.  However, the decline curve regarding oil production is bordering on pitiful.  The production is not sustainable, so far, and has not held up on a single well for any promising period of time.  Having said that, these were verticle wells, and it is well known that production in the Utica will only be developed and sustained through the use of horizontal drilling and artificial stimulation (fracking).  I still believe there is a good sized oil window, here, but let's not start the party just yet.  Could be...might me...maybe...probably.
Permalink Reply by bill h on May 28, 2011 at 5:34pm
...sounds a lot like the landman talk we got in PA a couple years ago
Permalink Reply by Jim Litwinowicz on May 30, 2011 at 2:47pm

Vertical vs horizontal are to different animals.  They have drilling into the Marcellus for decades and knew that it declined rapidly also. Horizontal & fracking changed the whole game. The bigger question may be how well the oil will flow through fracked shale.  Thats the unknown  here.   But the Eagle Ford shale in Texas has been producing well for oil.  But every shale is different. 

 

I'm guessing that within a couple of years, the energy companies will have figured out the best way to get good oil flow from the fracked Utica.  You don't spend a billion and a half on leases unless you are quite confident about what your after.

Permalink Reply by Henry on June 2, 2011 at 9:19am

Let's hope this deal actually works out for the landowners.  Chesapeake is notorious for signing contracts with landowners in groups like this.  They then, lease and pay for the land they want, and find a way to back out on all the others, leaving the landowners with nothing.  Check this site:

 

http://blogs.forbes.com/christopherhelman/2011/01/21/chesapeake-ene...

 

Many landowners in the Haynesville Shale were left with nothing after CHK backed out of contracts with them.

 

Also, landowners should be aware that Chesapeake is the object of large class-action lawsuits that allege they pay their lessors below the going rate for the gas that is drilled.  These cases are Vanoven v. Chesapeake and Coffey v. Chesapeake.  These suits represent landowners in the Barnett Shale and the Fayetteville Shale.  The lawyers are gearing up in the Haynesville Shale to file similar suits. 

 

You can read more about this on GoHaynesvilleShale.com.  On that site, I have a survey of the prices that mineral owners receive from their operator.  Chesapeake seems to pay the lowest of all operators.

 

I'm not saying don't deal with them.  But I strongly suggest you all make sure you have iron-clad, well-reviewed contracts.

Janice Lanphere HancharickPermalink Reply by Janice Lanphere Hancharick on June 18, 2011 at 5:13pm
If folks are only concerned about the signing bonus, royalty, length of term, and shale layers leased ... then they're in trouble and it won't take them 5 yrs. to figure it out!

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