Is it time for a HBP landgroup ?

  With the huge number of acres in the Marcellous & Utica held by production & the old leases that go with them , the general concensus seems to be "you're out of luck", yet many of those old leases have unitization limits too small to suit the horizontal drillers. Why are these acres just out of luck ? Usually landowners are told, well they had to buy the lease from the current operator or JV with them, so no bonus or higher royalty for you. Let us rewrite your old 1/8th lease to suit us or we'll go around you. But if enough HBP acres combined & said no, we want a little something too, then would we not have at least some bargaining position ? Just a thought, opinions please.

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Permalink Reply by Mark Allen on January 21, 2012 at 4:38am

give me a break, Bob Rea?    JRM has been in the business since 1999, this is what his company does on a day to day basis,built from the ground up,one client at a time.

  

Permalink Reply by matt on January 20, 2012 at 4:33pm

caualie, i also own 200 acres in that have a 160 acre pool maximum limit and i think what your proposing is a great idea if you can get 2 or 3 thousand or more acres they are not going to walk away from that especially if theres 5,000 to 10,000 barrels of oil under every acre!!!!! count me in. i actually told our atty. 6 months ago to do this he said he didn't have the resources,his loss.   

Permalink Reply by caualie on January 21, 2012 at 4:26am

 Whoa, whoa, easy guys. Nobody's talking up class warfare, welfare, taking from the rich, moving to Russia, or any of the other radical right talking points. We're talking buisiness here & maximizing a return on our investment (our land). And from that standpoint Little Cougar had a lot of points to consider. Would the costs & risks pay off better than trying to get drilled under the terms of an old lease.Experts to help don't come free & possible success is unknown. However, if the drilling company paid too much for a bunch of old leases that can not be used "as is" then isn't that a buisiness risk that they took also ?  I totally agree, that these old leases were written for the technology at that time, & the language in them varies widely. Some may specify one bore hole, what's a horizontal driller going to do with that one ? Generally it's going to be the unitization issue though.  It just kind of seems to me that these big companies came in & struck deals , the terms of which we don't know, with smaller companies & picked up the rights to huge acreages in the hopes that the landowners would never notice or protest the fact the leases were possibly not useable as they stand. Obviously when the big drillers moved in to the Marcellous initially, they tried to get leases & often did, under the old time honored 1/8 th royalty & minimal upfront money. But as time went on folks figured out that this was a  whole new ballgame in profit potenial. But again I want to emphasise that I do not believe this idea is for folks who are being bamboozled into thinking you are held, when in fact their wells haven't had any production in years, that's something else altogether. But however it turns out I don't plan on moving to Russia anytime soon.

Permalink Reply by Michael Lawrence on January 21, 2012 at 5:39am

and how many of these folks who had wells or have wells on their lands said no to free gas? .. that a producer worked long and hard hours in the winter to make sure that that family had FREE gas to the home . or sent the checks back.. no matter how small.. ?? none of them..and whether the current land owner was the recipient doesnt mean a thing.. what has been done is done..

Permalink Reply by Billy Park Whyde on January 22, 2012 at 7:25am

  Excuse me I used to have free gas, I was the one that welded my own drip tank, I was the one that bought the pipe, I was the one that bought the regulators,  I was the one that went out at 2 or 3 in the morning to find the freeze point in below zero weather. Since no gas was sold off the property it did not effect them at all, all the producer was doing was wasting the gas by letting it vent, yes I had gas but it was not free. The well now does not have enough pressure for me to use now.

  The owner of the well (producer) that has the last of three former wells drilled upon my property has a lease that states the lease can not be reassigned. ( Note he has a lease that was not even reassigned to him) I do believe at that point we can be somewhat hospitable to each other. 

Permalink Reply by Carl Penick on January 21, 2012 at 6:04pm

     Wow... Just read the replies. Thank you caualie for clearing this up. I did'nt realize some would be so defensive and misinterpret my letter. As I said at the beginning of the discussion, I am new to this and wanting to educate myself which is something I am not ashamed of. Thank you to those who are supportive and informative.

Permalink Reply by Larry P on January 21, 2012 at 8:28am

the key is always sticking together. if a landman can pick off a few decision makers hoping others will follow. he will

Permalink Reply by WLW on January 21, 2012 at 10:02am

The companies that came in here from Texas and bought up the old leases, got what they paid for. It is the landowner that owns the land, not the O & G companies. I had the need to stand up for my rights a few years ago when I was sued by a local company that bought up leases and tried to say they owned it all, when in fact they owned very little. The gentleman got up on stand and admitted to us and the judge that he never even LOOKED at the leases before buying them. Would you do that with the property you own??? I don't think so..... The companies from Texas have done the same. And that is NOT the landowners fault. You get what you pay for.

They should do their homework, just as we are doing. NOTHING is free here or anywhere else.

Permalink Reply by WLW on January 21, 2012 at 10:56am

AND

on the free gas kick, let me know when you see one of these producers working long hard hours for the benefit of the landowner. NEVER seen a one around here, heck they can't even mower the area around the well head in the summer. If I, the landowner had not brush hogged around it, you wouldn't see anything but Willow trees. You have got to be kidding, long and hard hours.

I made a list of about 10 issues to keep them out of trouble over 2 years age. How many do you suppose they have even looked at. ZEROOOOOOOOOOOO Maybe I should forward my list.

They have cut there work forces so much they can't even keep up with the few wells they have.

 But they are sure counting on making a killing from what they DIDN'T buy.......

Permalink Reply by Billy Park Whyde on January 21, 2012 at 6:21pm

 On the back side of my property there was a 2' white plastic gas line that was surfaced laid the owner of it (the line was Ludwig of the Ludwig and Kirby L&K restaurant chain) the line was to have been buried below plow depth. My neighbor went to bush hogging and hit it in heavy brush and weeds. The only thing that saved him was a very small about 4' deep 4 foot wide stream when he caught fire. A elderly man he some how made it up the hill and to his house about 3/4 mile from the fire explosion and still burning fire which also took out his tractor. He lost a lung and spent 4 months in a burn unit. the settlement was never disclosed but I personally know it wasn't pocket change. 

Permalink Reply by WLW on January 22, 2012 at 12:47am

In our area during the last gas boom most of the orange plastic lines were just laid on top of the ground. My parents still have pictures of them floating around the wells and collection points from other properties when the river flooded. The leaks were easy to find that way. 

Permalink Reply by Joe Miller on January 22, 2012 at 6:01am

I have a clinton gas well on my property drilled in 1972 .The company never paid royalty's and then filed bankruptcy and were bought out by another company.After more than three years we finally got a ckeck from the new company.They were taking oil and gas from the well the whole time but the paperwork magicly got lost..Of course those are the most productive years of the well but we were just S.O.L.My well also has a gas line laying on top of the ground (even though it states in the lease that it must buried below plow depth) that I have hit with the brush hog.Thankfully there was no explosion or fire and I got it shut off at the well. They just put a "saddle" on it and it has leaked every sense and that was 20 years ago.So I for one am not going to do them any favors by signing an amendment to an old lease they never upheld.The held by production is a joke.They have only taken enough gas to say they are producing it.At least in Texas it is not a producing well unless it showes profit,after deducting different production fees.

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