Replies to This Discussion

Permalink Reply by Lynn Wigglesworth on July 31, 2010 at 2:52am

There are a couple of us that have screwed up a unit where a vertical well is already drilled. My property is sitting right where East wants to put a horizontal. Another property directly to the northwest of the well is also not leased (we are both more than willing to negotiate a fair deal). The situation is at a standstill, and the well isn't being completed...they've only leased enough land for 2 of what I've heard should be 6 horizontals. Why would East drill a vertical when they haven't yet leased all the property they need to put in the horizontals? Seems stupid to me.

A year ago I was willing to sign for $2000/15%, and the landman told me they'd never go that high. Now they are offering that, but MY price has gone up. I suspect that East will continue to be stubborn and will lose a lot of leases when they expire. Then other companies will have a chance. I agree about East just punching holes to hold leases...they are drilling as fast as they can in Delmar/Shippen townships, but they don't seem to be laying any pipeline, so no one will be getting any royalties for a long time.

Permalink Reply by NANCY A THOMAS on July 31, 2010 at 3:05am

a gas site near us, the horizontal rig (phoenix rig #5) was pulled from the site. shell did not offer them, in their contract, as much $$$$ as phoenix wanted. only completed 4 out of 6 well holes. talk on the well floor, at that time, was that shell will be bringing in their own rig, most likely nabors. www.nabors.com also, i was told that there will be 36 gas well sites in 2011 in chatham twp, tioga co, alone. sincerely, nancy

Permalink Reply by Brian Day on July 31, 2010 at 3:40am

It sounds like everybody aught to sit tight on the hands we are dealt until maybe after November elections when legislation might change, or until mid- February when a lot of leases expire. I agree totalt with Lynn. East is going to have to pay market price to do all that they want, and market price keeps going up. My understanding is that the deal with Shell doesn't close completely until approval in December. Some bad changes could happen against East's plans in the laws of Pa. by then. I suppose they could be changes against landowners as well. It is hard to guess that one. The cards that I hold at this time are pretty much on the table and will stay there face up until February. East/Shell's time is running out and every day gets more expensive for them.

Permalink Reply by Lynn Wigglesworth on July 31, 2010 at 5:08am

Yup, me too. East knows (or should know by now) where I am, what land I have, and that I'm ready to make a fair deal. They just aren't willing to pay market price yet. As you say, market price goes up every day. Once production numbers are public (isn't that happening this fall?) it will go up even faster. Rumor has it that Tioga Co. wells are producing as well as Bradford Co. wells, where leases are worth a lot more. So I'm sitting tight.

Permalink Reply by paleface on July 31, 2010 at 1:24pm

The gas wells in tioga county are producing as much as bradford gas wells but the shale is twice as thick in bradford so the wells will be produceing for a longer time,thats why bradford is paid twice as much per acre.

Permalink Reply by Ann Ticopa on July 31, 2010 at 6:29am

This latest "sweep" of unsigned landowners could be, at least in part, to pick up landowners who are concerned about forced pooling passing; $2000/acre is better than $0/acre.

Permalink Reply by Ann Ticopa on August 1, 2010 at 5:00am

"Why would East drill a vertical ..."

One reason is to hold leases. Which, afaik, is being done now. The draft forced pooling legislation requires that a drilling rig be in place within a year (with possible extensions). That rig must be capable of drilling to the Marcellus formation, Sounds like a vertical well rig would qualify.

Vertical wells are drilled for exploration. They're also currently used to get gas from parts of irregularly shaped drilling units where it's not cost effective to run a horizontal.

One of the new talking points of the last East/Long landman here was how wrong-headed it is for any landowner to consider developing it themselves. Probably true if forced pooling passes. There is provision for requesting a hearing on that basis. But the gotcha is that a drilling company has to be lined up to do the well. It's not enough to show that it would be doable.

There is a minority opinion, based on the history of Barnett Shale wells, that claims horizontal wells aren't all that superior. That, based on cost of drilling, decline rate, ultimate recovery, etc. the payouts are comparable. So, I don't believe that not signing with one of the big horizontal drilling gascos NOW is, in effecti, rejecting my "last chance"

Permalink Reply by Lynn Wigglesworth on August 1, 2010 at 5:57am

Ann; that's my thinking, too. When gas prices go up high enough, I'm thinking that any reasonable-sized parcel could have a vertical well and still make plenty of money for the landowner and the gas co. Even if I get shut out of units all around me, there's still gas under me, and someday gas prices will be high enough again to make it worth going after. What sized parcel do you think it would take to support a vertical well?

Permalink Reply by Ann Ticopa on August 1, 2010 at 7:25am

The common number I've seen for the Barnett is 40 acres.

Permalink Reply by John Bower on August 4, 2010 at 6:49am

I was told that they can drill right up the the property line with a horizontal well. My question is this.
If another company drills on my property and goes right up to the same line in the same place would we not get each others gas

Permalink Reply by Ann Ticopa on August 4, 2010 at 9:35am

My guess is that normally operating companies wouldn't go right up to the line, for the reason you mention.

Permalink Reply by Ann Ticopa on July 31, 2010 at 6:09am

They (Long/East) seem to have brought in some landmen from other counties. The one who stopped here a couple weeks ago made the same offer and used the same (space out) threat. They're still unwilling to budge on Pugh, ancillary riights (P11), and non-surface.

That 87% number is doubtful; Tioga County is 30% government-owned. But, lets say he meant 87% of privately-owned land.

1,137 (TC total sq miles) X 0.7 (private) X 0.87 (East) = 692 sq. miles leased by East. Which is also 692 potential 640 acre drilling units. But a few of those units couldn't be drilled, so let's knock that down to 650 drilling units. At a cost of about $4M to drill a first well on a unit, that would be $2,600,000,000 to drill a single well on those 650 potential Tioga County units.

So, what puzzles me is why, except perhaps for a few stategically located parcels, are they even trying to lease more land now?

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