Replies to This Discussion

Permalink Reply by Shower Bath on July 10, 2012 at 4:05am

An interesting article on the end of the leasing rush. Hope you're leased and paid by now. See the link...

http://www.msnbc.msn.com/id/48129680

Randy

Permalink Reply by Shower Bath on July 11, 2012 at 5:34am

New midstream investments from Williams and Caiman. And there is an excellent Q&A with Neal Dingmann on the Utica Play ( titled How to play Utica Natural Gas opportunities of a lifetime) which is about the 13th article down. See the link...

http://www.drillingahead.com/page/utica-shale-news

Randy

Permalink Reply by Shower Bath on July 13, 2012 at 3:52am

Consol Energy quarterly update. Tusc County Utica well produces light crude in flow back. See the link...

http://phx.corporate-ir.net/phoenix.zhtml?c=66439&p=irol-newsAr...=

Randy

Permalink Reply by Shower Bath on July 14, 2012 at 4:40am

If you haven't checked this site lately, a little more on Consol, CHK, etc.

http://shale.typepad.com/utica_shale/

Randy

Permalink Reply by Shower Bath on July 16, 2012 at 4:04pm

An interesting article on NGL supply/demand, and future pricing as supplies rise. This could be a major problem for royalty owners and O&G operators in the wet gas window. As a landowner it's out of our control, but something to consider. See the link...

http://seekingalpha.com/article/723051-natural-gas-liquids-are-foll...

Randy

Permalink Reply by Shower Bath on July 19, 2012 at 3:51pm

It's the end of the quarter and all O&G companies will be giving operational updates, and earnings. See the link...

http://seekingalpha.com/article/732031-5-commodity-stocks-moving-on...

Randy

Permalink Reply by Shower Bath on July 26, 2012 at 5:00am

Check out the article on falling NGL prices. This could end up hurting all who are in the wet zone of the play.

See the link...

http://www.drillingahead.com/page/utica-shale-news

Randy

Permalink Reply by Utica Shale on July 26, 2012 at 5:19am

Randall,

 

 And help those landowners in the "oilier" portion in the western section of the Utica Shale.

 

" ... BENTEK's Jack Weixel adds that 'as (NGL) pricing continues to decline, operators will continue to pursue even oilier plays, with the activity in the Utica being the best example of this. ..."

 

Permalink Reply by Shower Bath on July 29, 2012 at 5:35am

An interesting article on forced pooling in Ohio. See the link...

http://www.dispatch.com/content/stories/local/2012/07/29/no-to-frac...

Randy

Permalink Reply by KLB on July 31, 2012 at 4:25am

According to this article:

"Unwilling landowners will be paid 100 percent of the value of their respective shares of the oil and gas produced from each well. Those payments will start after Chesapeake collects twice the amount of money it spent to drill its first well." 

 

I never heard this about forced pooling.  The landowner gets 100 percent of the value of their proportion from their property after Chesapeake collects twice the amount of money to drill the well?  If this is true, does the forced-pooled landowner get nothing until then? 

Permalink Reply by Philip Brutz on July 31, 2012 at 4:46am

Unless the landowner is willing to share in the cost of drilling the well.

1509.27 Mandatory Pooling Orders

1509.27 Mandatory pooling orders.
If a tract of land is of insufficient size or shape to meet the requirements for drilling a well thereon as provided in section 1509.24 or 1509.25 of the Revised Code, whichever is applicable, and the owner of the tract who also is the owner of the mineral interest has been unable to form a drilling unit under agreement as provided in section 1509.26 of the Revised Code, on a just and equitable basis, such an owner may make
application to the division of oil and gas resources management for a mandatory pooling order.
The application shall include information as shall be reasonably required by the chief of the division of oil and gas resources management and shall be accompanied by an application for a permit as required by section 1509.05 of the Revised Code. The chief shall notify all owners of land within the area proposed to be included within the drilling unit of the filing of the application and of their right to a hearing. After the hearing or after the expiration of thirty days from the date notice of application was mailed to such owners, the chief, if satisfied that the application is proper in form and that mandatory pooling is necessary to protect correlative rights and to provide effective development, use, and conservation of oil and gas, shall issue a drilling permit and a mandatory pooling order complying with the requirements for drilling a well as provided in section 1509.24 or 1509.25 of the Revised Code, whichever is applicable. The mandatory pooling order shall:
(A) Designate the boundaries of the drilling unit within which the well shall be drilled;
(B) Designate the proposed production site;
(C) Describe each separately owned tract or part thereof pooled by the order;
(D) Allocate on a surface acreage basis a pro rata portion of the production to the owner of each tract pooled by the order. The pro rata portion shall be in the same proportion that the percentage of the owner’s acreage is to the state minimum acreage requirements established in rules adopted under this chapter for a drilling unit unless the applicant demonstrates to the chief using geological evidence that the geologic structure containing the oil or gas is larger than the minimum acreage requirement in which case the pro rata portion shall be in the same proportion that the percentage of the owner’s acreage is to the geologic structure.
(E) Specify the basis upon which each owner of a tract pooled by the order shall share all reasonable costs and expenses of drilling and producing if the owner elects to participate in the drilling and operation of the well;
(F) Designate the person to whom the permit shall be issued.
A person shall not submit more than five applications for mandatory pooling orders per year under this section unless otherwise approved by the chief. No surface operations or disturbances to the surface of the land shall occur on a tract pooled by an order
without the written consent of or a written agreement with the owner of the tract that approves the operations or disturbances.
If an owner of a tract pooled by the order does not elect to participate in the risk and cost of the drilling and operation of a well, the owner shall be designated as a nonparticipating owner in the drilling and operation of the well on a limited or carried basis and is subject to terms and conditions determined by the chief to be just and reasonable. In addition, if an owner is designated as a nonparticipating owner, the owner is not liable for actions or conditions associated with the drilling or operation of the well. If the applicant bears the costs of drilling, equipping, and operating a well for the benefit of a nonparticipating owner, as provided for in the pooling order, then the applicant shall be entitled to the share of production from the drilling unit accruing to the interest of that nonparticipating owner, exclusive of the nonparticipating owner’s proportionate share of the royalty interest until there has been received the share of costs charged to that nonparticipating owner plus such additional percentage of the share of costs as the chief shall determine. The total amount receivable hereunder shall in no event exceed two hundred per cent of the share of costs charged to that nonparticipating owner. After receipt of that share of costs by such an applicant, a nonparticipating owner shall receive a proportionate share of the working interest in the well in addition to a proportionate share of the royalty interest, if any. If there is a dispute as to costs of drilling, equipping, or operating a well, the chief shall determine those costs.
Amended by 129th General Assembly File No. 28, HB 153, § 101.01, eff. 9/29/2011.
Amended by 128th General Assembly File No. 27, SB 165, § 1, eff. 6/30/2010.
Effective Date: 06-14-2000
Lawriter - ORC - 1509.27 Mandatory pooling orders. http://codes.ohio.gov/orc/1509.27
2

Permalink Reply by KLB on July 31, 2012 at 5:59am

Thanks for posting this.  I have been told many things about forced pooling... that the forced pooled properties receive just the state minimum royalty of 1/8, or that they receive an average of the royalties that the rest of the unit are getting.  But, this is still confusing to me.  For example:

"Allocate on a surface acreage basis a pro rata portion of the production to the owner of each tract pooled by the order. The pro rata portion shall be in the same proportion that the percentage of the owner’s acreage is to the state minimum acreage requirements established in rules adopted under this chapter for a drilling unit"

Is there a state minimum acreage for horizontal drilling?  It was my understanding that the only state minimum was 40 acres for a vertical well. 

And this,

"If the applicant bears the costs of drilling, equipping, and operating a well for the benefit of a nonparticipating owner, as provided for in the pooling order, then the applicant shall be entitled to the share of production from the drilling unit accruing to the interest of that nonparticipating owner, exclusive of the nonparticipating owner’s proportionate share of the royalty interest until there has been received the share of costs charged to that nonparticipating owner plus such additional percentage of the share of costs as the chief shall determine."

 

I am still not sure if this is saying the force pooled owners still receive the royalty interest before the 200% is met or not.   Does "exclusive"   mean the royalty is excluded from going to the "applicant"  in which case the force pooled landowner would still receive some royalty payment from the start?  Then, they receive all the proceeds from their share after that?

And, a more general question... how long does it take for the driller to make back 200% of what it costs to drill the well?

I am asking these questions because I do feel that I may be in danger of being force pooled!

 

 

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