leasing in columbiana county

I am within one mile to a well, all my surrounding neighbors have leased with chk, they offerered me 2500 16% last month and I turned them down.  Now I have an offer of 5900 an acre 20% royalties from a different company.  How would that work as far as royalties if I was to sign with a differnt company other then chk?  Will they still produce my land or just cut me out because the well that is near me is a chk well.  Any advice is much appreciated.

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Jim ShoosPermalink Reply by Jim Shoos on May 23, 2012 at 10:20am

And don't listen to the landman when they bloviate on and on about how they're going to drill multiple laterals from one pad.  We are years away from that being the normal operation.


Hmmm... must be a figment of my imagination when I look at my company's production map and I see three to four horizontal wells per pad.  But you're the expert on the subject, right?


0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 23, 2012 at 11:35am

I'm not saying that it won't happen.  In fact I made it clear that it will eventually be part of normal operations.  But for the moment CHK is far too busy drilling and HBPing every single acre they can.  I've seen a dozen units with "proposed" multiple laterals yet not one has been drilled yet.  You're in the business, look at the numbers.  HBP a 640 acre unit before it expires and costs you $3,200,000 (assuming a steady $5,000/acre lease price) or drill an extra hole from a pad that is already HBP and save ~$1,000,000?  Man you're condescending.  No wonder everyone thinks you're an asshole.  I'm in the business and have made a great living doing so, yet I'm able to communicate with everyone on here without acting like everyone who isn't me is a moron.

Jim ShoosPermalink Reply by Jim Shoos on May 23, 2012 at 12:00pm

bloviate \BLOH-vee-ayt\ , intransitive verb:
To speak or write at length in a pompous or boastful manner.

But I'm the condescending one??? 

FYI... I am an asshole, but I'm a knowledgeable asshole.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 23, 2012 at 3:43pm

Sorry, I didn't know that we were supposed to spend our time on here defending the landmen who, in my experience, will say basically anything to get a lease.  As far as being a knowledgeable asshole there's no debate from me.  Your intelligence and knowledge of the industry was never in question, only your snarky, smug attitude.  And I somehow doubt my use of intransitive verbs qualifies as condescending.  

con-de-scend-ing

adjective
showing or implying a usually patronizing descent from dignity or superiority:
"Hmmm... must be a figment of my imagination when I look at my company's production map and I see three to four horizontal wells per pad.  But you're the expert on the subject, right?
Jim ShoosPermalink Reply by Jim Shoos on May 23, 2012 at 4:55pm

I suppose everybody has their "people they love to hate" list.  Landmen seem to top a lot of landowners lists.  Again, I will refer to the category of people you are describing as "land agents" because they generally don't possess the formal training that true landmen receive.  Sadly, they don't have a personality 101 class as part of the Petroleum Land Management Program, although they do have an ethics class. 

Once you understand that you are dealing with an individual that is there to do one thing, and one thing only... get you to sign a lease, and that this individual works for an oil and gas company and therefore doesn't represent you or care what is in your best interests, then and only then will you be able to get the chip off your shoulder and not place a false degree of reliance upon these land agents.  EVERY single item in an oil and gas lease... be it the bonus per acre, the royalty percentage, the size of the unit, the requirements to restore land, test water, etc are things that either benefit the landowner, or benefit the producer.  A concession on any single item takes money out of the producers pocket and puts money into a landowners pocket.  What is so difficult to understand that these land agents aren't there to do anything other than strike the best deal for the guy that signs their paychecks? 

Just for clarification, I do not condone lying, cheating or misrepresenting things to anybody... ever.  Honestly, the bulk of these land agents are not well versed in understanding what the lease document actually says and thus when they say things, chances are they probably don't know any better.  That's a sad thing, I know... but nonetheless it is true in many cases. 

Permalink Reply by Alan Pavlik on May 24, 2012 at 7:59am

My experience has been when there is a boom going on alot of lay people become "land agents" and they either don't know the language of the lease or don't bother to learn it because they are basically selling  you on the lease bonus money. Alot of times when they are asked a question they simple reply with a fly by the seat of their pants answer or agree with what you want to hear.

This happened in the early 1980's when tight sand prices brought out the land agents in groves.

The Univeristy of Texas and Oklahoma offer a four year degree in  petroleum land management  for the person who wants to become a Professional Landman.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 23, 2012 at 11:30pm

I like how you assume that I hate the entire profession of landmen and/or land agents, despite the fact that I've working in the industry for years.  All I said was that in my experience (which based on my love of Popper seems highly incongruous) land agents will say whatever they need to in order to get the paper signed.  There are countless examples on these forums of landowners being lied to by agents.  I suppose part of that problem stems from their employer (CHK) and their utter lack of respect for the give and take process of contract negotiation.

Permalink Reply by monty deruyter on May 24, 2012 at 9:06pm

At least one has multiple laterals, the Trebilcock pad has one drilled and another drilling now.

 

Permalink Reply by H. Allison on May 24, 2012 at 6:13am

Hi, I am in the same boat. Would like to talk to sign w/ Ches. but can't get them to agree on 5500 an acre and a good lease. The lease is not unreasonable.

It appears I may be 600' within in a unit, appears lateral will go under my land (only own 7 acres). Pad is built.

Ohio law is lateral stays 500' from unleased property. Same situation on another 9 acres I own (possible pipelines on this property)

Any advice or signing updates?

Permalink Reply by William Henceroth on May 24, 2012 at 10:29am

You mentioned possible pipelines in your property.  I have been approached about running a pipeline across my property.  They want to run an 11 inch gathering line.  Any thoughts on what this is worth?

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 24, 2012 at 8:32pm

It's worth more than whatever their first offer is, I promise you that.

Permalink Reply by William Henceroth on May 24, 2012 at 8:55pm

I was offered $15 per foot.

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