Do you have a lease being held by a shallow well

My family owns 652 acres in Benezette, PA. We leased our property to a company and they drilled a shallow well the last week of the lease. The well is dry and they have not attached it to a pipeline. The well was drilled to hold the lease for possible Marcellus and or Utica drilling. Is anyone else having this issue? If so, what can be done?

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Permalink Reply by ralph monico on January 16, 2013 at 3:34pm

Dave,

Consult an attorney to determine whether deep rights were granted to the leasor in the original lease.  Deep rights were not always granted in older leases.  Many companies approach landowners to "amend" exisitng leases to secure deep drilling rights.  They typically offer a nominal amount to get the landowner to execute the amendment (nominal = a few thousand dollars).  Assuming your family retained the deep rights, they are worth much more than a few thousand dollars.  Also, remember the real money seems to be in the royalty stream (and not necessarily in the bonus money payments). 

 

good luck. 

Permalink Reply by Susan Handy on January 21, 2013 at 10:14am

Check the lease...see if the company has made any money on this so far....if in the lease it says they must 'make' money then file a fortfeiture against the company and get it to the courthouse and to the company...see number of days required to wait.  Hope that company doesn't respond within the required number of days.  If they don't, send them a letter telling them that the lease is cancelled as they did not meet the requirements of lease.  If this isn't in your lease, try to find something to work on like this.  Good luck!

Permalink Reply by John Goold on May 14, 2013 at 5:30pm

Often at least in Ohio if an older lease say production it often implies payable production which means the company must profit.

Permalink Reply by Robert W. Sandera on January 22, 2013 at 5:36pm

I am an atty and know oil and gas the things to consider as addendums to your lease should be

1. free gas hooked to house if they won't have them provide all regulators meters parts and line ran within 2 ft of the house for you to do final hookup. Free gas can cost as much as 7000.00 to hook up on your own.

1. b if free gas is not hooked up then a yearly payment for the allotment of free gas not used.  My lease allows 300,000 units to my homestead.

2. gas over free gas limit ask for at the wellhead price not retail price

3 water testing prior to drilling

4 try to get your own meter or anytime you can inspect all equipment see if they are inattentive to properly reading meter, dead batteries blank charts out of ink etc.

5. recovery of land within one year

6  A MUST or they will say you should have had it in writing and I did and made them come back 4 times. cleanup remove shred burn completely destroy any mess woods etc

7 so many ft from a stream, building etc beyond states law.  remember a gas well is a bomb that can take out a 1/4 mile

8. Location of equipment and drilling locations must be agree able, size and widths of driveways how much gravel to use etc no mud trails no created easements to back lotters etc

 NON Unitizing conventional wells not allowing everyone else to be paid for it so like payment is 12.5 percent by law or more.  unitized in a 640 acre unit and you have 100 acres is like 1 640th times 100 times 12.5 percent so way less unless there are many wells in that unit may help.

also Unitizing only with immediate land owners not 12 miles down the road from some ancient lease. this happened to my neighbors.

9 protect other gravel etc rights

10. Unitized or NON unitized. a NON unitized well pays you for your gas

10. lease to certain depths protect your rights to gravel coals water etc

11. extra cement process.

12. Distances form farm animals water supplies etc.

13. Repair broken wells within so many weeks etc

14. Purchase well at scrap metal price when they are done using it so you own it outright.

15. replace 2 inch pipe with now right before you own outright etc.

16. Supply all parts for free gas

17. supply enough free gas for multiple dwellings

18. routes and layouts of pipelines ( strait down road verses cut across middle of field.

19. payment at so much a ft for a pipeline across property.

20. must replace any contaminated water with safe potable drinking water

21. bonus for signing lease.

22. shorten lease to 2-3 years force them to drill quicker                        

23. When you are paid for the gas they sell with range resources its 3 months after its sold

Any drilled well will be a producing well not shut in for conservation locking up land leases etc.

These are things I recommend keep in mind they will allow about 5-6.  Lease to who will own and run the pipeline in your area if you want drilled as fly by night outfits use extorting to sell your lease to pipeline owners.

Remember an arbitration agreement probably means you cannot file a litigation. Also if any litigation arises it will be in the jurisdiction on your choice.  Courts uphold this when they sign off for your state etc.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on January 24, 2013 at 3:08am

GOD took me to you. Read what you said. Oh, so right. SAD - the country is going in the directions that it is...BUT there ARE still people who BELIEVE! and LOVE this country. NO ONE 'takes your power away' - you give it away. (social studies teacher in HS said this - I never forgot it!). PC = PC (Protect the Citizen = Prosecute the Criminal). THANK YOU...thank you.

My father did many things 'right' back in 2001 with our land. Lease has this: "lessee shall not assign this lease to any other operating company without lessor's written consent." ALSO this...

"Lessor retains the right to drill and produce any formations above the depth of 1200 feet from the surface.  In addition, Lessor retains the right to drill and produce any formations below the Queenston shale.  However, Lessee has the right to match any valid offer from other companies interested in drilling into said formations."

***NOW - 2011 - received a letter & CoPY of lease - HIGHLIGHTING the 'lessee shall NOT assign..." sentence - with attached statement for me to sign & send back...because they DID this already...and were hoping that I'd just 'sign, seal, & deliver' to them my 'ok'. NOT! BIG NO-NO!!! There ARE shallow wells, there since 2001...BUT am I still under 'obligation' now that this BLACK  RIVER + is beginning to get tapped? I am hpoing that I am nOW in a position to RE-NEGOTIATE to a better vantage to myself with what they've DONE TO THEMSELVES! - Is it possible?...got my fingers crossed! in HOPE!!! ALL is 'well', just can ALWAYS be BETTER! thanks - GG

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on January 24, 2013 at 3:25am

GOD told me not to read your ramblings any more.  I chose not to listen, at my own peril.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on May 19, 2013 at 2:19pm

Grayson - you're acting like a 'real ruffian BLOWHARD'. Be a gentleman & take a seat. 

---------------------------------

Attorney Robert W. Sandera, sir...

I forwarded your writings on suggested addendums from Jan 22, 2013 @ 11:36pm to *Lance Nimmo & *Bob Jenness (landOWNING members of this GMS site, as am I).

I had 'kept YOUR ADDENDUM LISTING safe' & have just NOW come back across them...

*QUESTION: *IF 'Drilling Rights below 1,200' (twelve hindered feet) are retained...for oneself -OR- PERSONALLY CHOSEN/independently designated driller - AGAIN, severance DEPTH at/below level of 1,200' (twelve hundred feet), CAN I seek out other potential DRILLERS? - more than a *square mile of land 'hangs in the balance'...nice 'big block'...carries it's own weight. (big responsibility...'weight, indeed!)

YOUR THOUGHTS? please...

As one light lights another, nor grows less - so nobleness enkindles nobleness.

Permalink Reply by Robert W. Sandera on May 20, 2013 at 1:15am

I guess I don’t understand what you would be trying to do. You want to sign a lease but then get another company to drill because you have a un-unitized well and only unitize from a certain depth down if you can still change your lease. Is that it?

Here's generally the way to go. Look for the company doing all the business in the area that owns or runs or will own the pipeline. Nobody wants to drill and use someone else's pipeline. I called every other company then the drilling company when they drilled out here and that was what they told me.  They won't drill on someone else's pipeline.

Fly by night outfits come around say they we'll drill sign people up then deal the leases off to the people that will actually drill or want the lease because they have the pipeline. If there drilling in your area sometimes a shorter 2-3 year lease will get them to drill on your property first.  I set up a three year lease not 5. They rarely tell the truth I had water test and was told maybe in 8 months they would come and 20 minutes later they were there. They were in such a hurry they posted someone else's permit till they got the right one.

The biggest thing I would try to shoot for or change now would be they cannot shut in a well without some sort of payment and if a well breaks they have a limited time period to fix it and that it should be used to full capacity. Basically you want to make sure they can't just drill a hole to keep a lease in force they have to create a producing well.

We had sport of a malicious well tender making threats on people because he was dying and didn't care about nothing.

I put in a clause that a well cannot be pulled without allowing it to be bought at scrap metal prices. Rumor was that weaker wells out here are going to get pulled.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on May 20, 2013 at 5:10am

I wondered where you went, Sandera. Didn't you design a car that was extremely energy efficient?...and drive it up to DC from down south?...if I am recalling correctly?

I remember that you were dealing with physical matters.... I had saved this notation concerning 'lease addendum's', but just couldn't re-locate them for quite some time.

Then when individuals worth their salt:

Bob Jenness - Crawford Co. - How Will We Know a FAIR Oil and Gas Lease When We See It/Them? - Go... 

...and Lance Nimmo's - Shell drops the floor out of Lease Offer - Go Marcellus & Utica...

...are you familiar with CMU's Pres., Jared L. Cohon? Biography - Carnegie Mellon University | CMU ...his 'specialty is 'Environmental and Water Resource Systems'...he is retiring from the college this year & desires to teach again.

As one light lights another, nor grows less - so nobleness enkindles nobleness. GBU (God Bless You).

Permalink Reply by Robert W. Sandera on May 24, 2013 at 12:40pm

I had a lot of problems after a cancer surgery the recovery wasn't going good. I am great now after getting rid of their drugs. I've beat it now 7 plus years and even developed a treatment I am supposed to be working with Cleveland Clinic on. The car was the Mike Shetley Ralph Moody Moodymobile ya it was driven to Washington and a Senator test drove it and said it worked. In 1978 we leaned the engine down to get 84 MPG city and 105 MPG Highway. Jimmy Carter was said to contract the engine to go in all the mail jeeps. And am superseding that by light years.

I know every detail of that car and have one of those engines As soon as Reagan Bush came in the Bush family so connected to oil it all disappeared.  If you check your political history they destroyed anything that would have benefited Americans with cheap energy including Reagan saying the solar panels didn’t work on the white house.  Their still working fine after 30 some years on a library in Connecticut. I've worked with both parties all the way to the top and I can promise you this. Our Country will never be energy efficient until we have a President with the guts to break the system they set up nothing good can ever happen. JP Morgan owns the Media and GE and controls all the worlds currency etc.  I am considering filing a 11 trillion dollar suet as a class action  for the people of the United States against them for world espionage. So I guess you can say I got the guts. I could put this country back to work tomorrow and I know if I license out the new engines I'm developing and free up the credit the way I would I could sell 50 million American cars just like that.  How many 100 million jobs you think that would create? I ran and will run again seriously this  time for President because I am the only man with a real plan to save this Country and Jail the people that did this. This was the third time they pulled their garbage and they took it too far. A person would have to be President to have enough power to put them in their place which hopefully someday is Jail. In 1979 I was getting almost 23 MPG out of a fully loaded 75 T-bird with 460 that usually got 10-13 MPG That should show you I know how to retrofit and benefit our big American better built cars and get rid of this Chinese Junk.

Permalink Reply by Susan Handy on May 25, 2013 at 1:48pm

What kind of cancer?  My son has multiple myeloma.....

Permalink Reply by Robert W. Sandera on May 25, 2013 at 4:17pm

I had esophageal cancer inside the junction of the stomach caused by acid reflux so bad because of a undetected parathyroid tumor for over 14 years

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