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Permalink Reply by michael j belaj on August 25, 2011 at 5:06am

Hi Faith I would have to look at your lease to see how the unitazation clause reads. If you have been paid a delay rental on the lease is it for 5 years ? Let me know Mike

Permalink Reply by Faith Johnson on August 25, 2011 at 12:05pm

This is a rough draft of the lease we are going with and its for 5years, heres what i think you need, to answer my questions!     Unitization – Pooled Units.        In the event Lessee desires to pool or unitize the Leased Premises with other lands and there is no spacing order previously established by a governmental or regulatory body, subject to any limitations below, Lessee is granted the right, at its option, to pool or unitize any land covered by this Lease with any other contiguous lands included with other leases as to any or all horizons of gas, oil, or other minerals described above in the Grant of Lease in this Lease so as to establish pooled units.  No pooled unit for any vertical well with no horizontal drilling component which includes any portion of the Leased Premises shall exceed sixty (60) acres.  No pooled unit for any well that includes lateral or horizontal drilling shall exceed six hundred forty (640) acres unless Lessee drills a horizontal well in which the length of the wellbore from the horizontal position is at least five thousand (5000) feet.  If the length of the horizontal wellbore is equal to or greater than five thousand (5000) feet, Lessee’s unit may contain more than six hundred forty (640) acres as determined by this formula: A = [(L x 0.025) + 640], where A= unit size in acres, and L = the length of the wellbore from the horizontal position.  Notwithstanding the formula listed above, no unit is to exceed one thousand (1000) acres regardleincluding a copy of all plats, maps and exhibits to such application or declaration.

Unit Configuration.    Taking into consideration the productive limits of the producing interval and the unit configuration for the Leased Premises, the lands included within the production unit for a well shall be contiguous and in the form of a square or rectangle.  Every effort shall be made by Lessee in designating production units to avoid releasing small or irregular-shaped portions of the Leased Premises.  Acreage assigned to wells producing from different zones may overlap and shall overlap when necessary to comply with the requirements of this section.  If a well is producing from more than one formation, its production unit’s size and configuration shall conform to the Ohio Department of Natural Resources (or other governmental entity with jurisdiction) rules applicable to the well which provides the largest production unit (subject to the size limitations stated above).  If all or a portion of the Leased Premises is included in a pooled unit, then for purposes of this paragraph all the lands within the pooled unit shall be considered a part of the Leased Premises, and the size and configuration of the production unit(s) must conform to the requirements of this paragraph for a production unit. 
ss of the length of the wellbore from the horizontal position.  Lessee shall furnish to Lessor prior to any application for formation of a pool or unit a copy of the declaration or proposed declaration of the unit of which any portion of the Leased Premises shall be a part,
Top Lease; Right-of-First Refusal.        In the event Lessor chooses to grant any remaining rights reserved by Lessor under this Lease to any party other than Lessee, then before any such grant Lessor shall provide Lessee with a writing setting forth all terms and conditions of such other grant, or a true copy of any lease or other document reflecting such grant.  Lessee shall be afforded a period of thirty (30) calendar days following receipt of such written notice during which time Lessee may elect to exercise a right of first refusal to assume the obligations of lessee or grantee under such other proposed grant on the same terms and conditions contained therein.  Should Lessee so elect, Lessee shall notify Lessor in writing within such thirty (30) day period and submit therewith any up-front payments or other consideration described in such proposal, along with a signed lease or grant documents accordingly.

Permalink Reply by michael j belaj on August 25, 2011 at 12:40pm

Faith The unitization clause in your lease is good I like the language. The leases that are being written today provide for the lease money to be paid up front for 5 years if they dont include your acreage in the unit the drilling company can not hold your lease past the 5 year term at that time the lease would expire. Make sure befor you sign that you are paid a fair price per acre talk to your neighbors find out what others are being paid. If you tell me where the acreage is and how many acres I can let you know what the going rate is. I work for alot of oil companies so I am up to date. Thanks Michael J Belaj Cambridge Ohio

Permalink Reply by Faith Johnson on August 25, 2011 at 1:16pm

I have 5.010 acres in Guernsey on Gunn rd madison twp but its in a group of 28,000 acres now how can they pay the 5yrs up front if they don't know if your land will be in a unit or not? From what I uunderstand most of my neighbors are with my group, I live in Florida and our dad passed in 2009 and me and my 2 sister were left the property.

Permalink Reply by michael j belaj on August 25, 2011 at 1:43pm

Faith That is just how it works you will be paid and chances are your acreage will be put in a drilling unit a paid up lease in that area is going for  2500.00 per acre to 3000.00 per acre paid up front for five years. You will have to wait about 60 to 90 days after signing  for the drilling company to check title on your acreage. When the well is drilled and put in production you will get a royalty interest in the well. Good luck Mike 

Permalink Reply by Faith Johnson on August 25, 2011 at 1:56pm

So are you saying my land is in a good area? I hope? LOL

Permalink Reply by michael j belaj on August 25, 2011 at 2:23pm

Yes your acreage is in a good area however the drill bit tells the whole story. Mike

Permalink Reply by Faith Johnson on August 25, 2011 at 3:08pm

Oh that much I do know 'COME ON DRILL BIT!!!!' LOL

Permalink Reply by Steven Gardner on August 25, 2011 at 6:31pm

Go ahead and say it Faith... "Drill Baby Drill"

 

Permalink Reply by Faith Johnson on August 25, 2011 at 8:18pm

Ok then "DRILL BABY DRILL"  ha ha

Permalink Reply by Faith Johnson on August 25, 2011 at 10:10pm

Hey Mike, another question on my deed it says seller retains all right to gas and minerals blah blah on any EXISTING wells, which there is an old dead gas well with no activity on it for over 20 yrs, i checked with the lady at the county and she searched for me and she told me there was no activity since before 1984 when the owners sold the 130 acres to an investmant company who broke it all into tracs and sold it, she said it appears from what she sees we have the mineral rights, do you agree? She found no other leases according to her!!

Permalink Reply by michael j belaj on August 26, 2011 at 2:35am

Faith That old well could cause you lots of problems it may tie up your acreage. Is the well on your property? You will need to get a copy of the drilling Plat from ODNR. Do you know the owner of the old well ?  TKS Mike 

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