Replies to This Discussion

Permalink Reply by Julie Harchalk on March 12, 2013 at 4:11am

Hi Joseph,

 

you offer some very sound opinions here. I agree with this problem of how the landowner groups are being handled. One in particular has created so much animosity within the county that it makes the legitimate ones look bad. But they are out there! I am a real estate broker who recently joined this discussion group and appreciate your effort. I've been researching this oil and gas exploration subject for a few years now and feel confident in putting together acreage that makes sense and is viable for all concerned. Too many landowners have jumped on a band wagon and it is not in their best interest to do so, waiting until more information becomes available and knowing exaclty what the industry is doing would be better for all. My idea is to target a particular area and once the land package is in place take it to a major company and negotiate for the best possible lease for all involved. Thank you.

Julie Harchalk 

Permalink Reply by Joseph-Ohio on March 12, 2013 at 4:22am

Sounds very solid but in many cases I don't think it will turn out to be simple.

It will take work.

J-O

Permalink Reply by Finnbear on March 12, 2013 at 4:20am

You are correct in that there is value added in having a ready-made drilling unit. The problem lies in that there is no universal "standard" for a drilling unit that works for every producer. Company A has a set of standards for how they like their units put together. Company B has their own set of standards and they may not at all be compatible with Company A's and so on down the line of interested producers. Another problem is that unitization is always in a state of flux, right up to the point the well is drilled. Hypothetically, if you could get solid information from a particular company on how exactly they would propose their units, then you could assemble properties in a manner that was attractive to them. Traditionally, O&G producers have been very secretive about their operations. Getting this information accurately is the challenge, and most producers won't share this with you because it is counterproductive to them. They want to lease you as cheaply as possible and giving you this information is going to cost them more, even if it might make their job a bit easier. Just my experience - YMMV.

Permalink Reply by Joseph-Ohio on March 12, 2013 at 4:29am

Thanks Finnbear - I know what you write is pure fact.

What it all seems to me to amount to is reasoning to do counter-productive / stupid things.

Can we, at this point, still call it 'reasoning' ?

J-O

P.S. I'm afraid I need an explanation of what the abbreviation (or acronym) YMMV translates to ?

Permalink Reply by Julie Harchalk on March 12, 2013 at 6:25am

Thank you gentleman-FinnBear and Joseph-Ohio,

I know what you say is correct from my own experience. I actually have a land package together and am organizing the principals currently. I was born and raised in the county and have a keen interest in doing the development properly. A prominent land owner has asked me to put the project together and I have every confidence it will be sucessful for all involved-you are right however, it isn't easy! My research over the years and constant learning and attending seminars etc., has given me alot of insight as to what to do but there is no "class" or textbook to resort to that's for sure! The southern counties in Ohio have alot of information to offer, I attended the Crain's Cleveland Business seminar last month at Landerhaven-over 600 people were there, the speakers were from Shell Oil (a former president of Shell), a midstream capitalist, and Carrol and Harrison counties to name a few-this is how to learn the business I believe.

 

Julie Harchalk

Permalink Reply by Finnbear on March 12, 2013 at 6:51pm

Your Mileage May Vary - its that standard disclaimer you used to hear when the automakers touted gas mileage ratings for new cars

Permalink Reply by Joseph-Ohio on March 12, 2013 at 9:37am

Internet Slang :

YMMV = Your Method May Vary

Had to look it up on the net.

Seems to fit the circumstance - so I'll go with that !

J-O

Permalink Reply by Joe on March 12, 2013 at 1:25pm

Ladies and Gentleman,
You all have fantastic ideas and they are all respected and valued. My thoughts are in no way ment to be disrespectful. I have read your comments and feel the advice and thoughts are coming from a vast wealth of knowledge. With that being said here is my question. Where is the offer or offers of a signing bonus for a negotiating starting point. Its kind of like (in my now pessimistic mind) putting the cart in front of the horse. The new maps we just viewed in the last week show reason for my pessimism. I'll continue to look for your advice as you choose to offer it.
Thanks
joe

Permalink Reply by Joseph-Ohio on March 12, 2013 at 2:48pm

Joe (and anyone else who cares to read along):

I for one have my tongue firmly planted in my cheek regarding the new maps published by the ODNR as they pertain to Ashtabula County and as a result am not pessimistic regarding energy resources contained within our immediate geography.

For one reason, I note the ODNR's own disclaimer in the lower right hand corner of each map.  There they plainly state that the maps will be updated as more real reports of new wells and tests are made available to them.

However, I share your pessimism about how soon that information and the updating will happen.

I attribute the demonstrated slow pace being due to such things as government interjecting new legislation and taking their own sweet time in deliberation, and the seemingly one sided (not landowner or consumer considerate) marketing methods that have been used (and which are still being used) to develop the domestic energy resources that seem to be at our fingertips.

Instead of concentrating the development in such a manner as would promote a speedy domestic economic rebound the development seems to be more concerned about setting things up to export our energy resources overseas / to foreign states and assisting their economies.

Things in my opinion have already taken too much time to accomplish what I believe to be too little.  When I look at it all it seems to me like some kind of kamikaze approach to our domestic energy development and recovery program.    

I like you am looking for ways to speed things up.

How will it speed up ?  I think it's going to take some expressed interest from the E and P (Exploration and Production) companies.  When that occurs it's going to take the landowners turning to the right people to get the best deal.  I'm thinking that smaller landowner groups working with  their own selected attorney have the best chance at maximizing their return.

The landowners only have one shot at selling their leasehold contract to an E and P interest.

It seems to me that how much to ask for would come after an E and P interest expresses a desire to open negotiations with an individual landowner or landowner group.  That's how it worked with the Magyar group south of SR 6 for example as I recall. 

What will cause an E and P interest to express a desire to negotiate ?

Perhaps an individual landowner or landowner group 1st contacting them or perhaps they being 1st to contact the landowner or landowner group - either way.

I've been forever stirring my own pot by contacting E and P interests but as yet have not heard any serious inquiries.  Perhaps that will change soon.  I certainly hope so.

What else could be holding things up ?  I for one don't think it's just the ODNR maps.  I think it's due to other reasons more in alignment with those described above - Politics and Marketing Techniques.  Are those separate reasons or are they working in tandem ?  I can't rule out the E and P interests intentionally slowing things up either.

I'm a very cynical guy trying to survive and even capitalize if possible in what I sense to be a very hostile environment - just like it's been for the majority of the time I've spent on our planet.

 

  

Permalink Reply by Joseph-Ohio on March 12, 2013 at 11:17pm

Above I've asked myself  'What else could be holding things up ?'.

In earlier posts I've written about those who blame it on a 'lack of infrastructure'.

Considering how long I've been hearing that line it's not sounding like a reason anymore - rather an excuse to blame things on.

Excuses don't get the job done.

If it's posing that much of a problem let's call in the U.S. Army Corps of Engineers and the National Guard to get the job done.

We do it for the 3rd world economies - why not our own.

Is it a matter of National Security ?

I think so.

We've got a standing army.

Lets put them to work here at home.

Also, if there's not enough incentive for E and P companies to get to work and organize drilling units and develop them, then subsidize a program and make it more attractive and profitable to get the job done.

I think leadership has to regroup, forget the excuses and get to work on getting our domestic energy program off the ground and contributing in a major way to our domestic economy.

Always only in my opinion. 

Permalink Reply by Finnbear on March 13, 2013 at 5:48am

Getting a pipeline in place is a MAJOR project. A route (with a number of alternates) must be planned. Rights Of Way must be secured from willing landowners (hence the need for alternates). Permits must be applied for and approved by the governing body. Environmental studies must be done for every square foot of the right of way which includes an inventory and mapping of soil types, wetlands, terrain, watersheds, all plant and animal life within the right of way. A plan for dealing with sensitive areas must be formed, submitted to the appropriate governing body for approval, and then hopefully approved. After all this (and more), bids must be reviewed and accepted from contractors who will actually install the line. The digging begins, miles and miles of pipe is welded and laid, and covered back up, and hopefully the contractors follow the terms of the contract and their work passes inspection. What should be a simple, dig, lay pipe, bury, and hook up the ends, is now a long, drawn out, expensive, convoluted process due in large part to the layer upon layer of government regulations that are now involved.

As far as "then subsidize a program and make it more attractive and profitable to get the job done" - I say NO WAY. If you add even more government involvement than we already have, the process will become even more bogged down in bureaucratic red tape, more expensive, less profitable, and even more frustrating for all involved. If a project is commercially viable, then let it stand on its own merits and move forward with it - do NOT ask taxpayers to subsidize it.

Permalink Reply by Joseph-Ohio on March 13, 2013 at 6:00am

Duly noted - but in frustration Mr. Finnbear.

Thank you for your reply and advice.

Regards,

J-O

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