Eclipse-Oxford leases and extensions in Guernsey County

I am a landowner in Guernsey County with a 4 1/2 year old Oxford lease that is set to expire in about 6 months.  I, and apparently many others, have just received an offer from Eclipse to extend the lease for 3 years for a generous one time payment of $100.00 and the same 12 1/2%  royalty (but no line charges).  The extension provides for the grouping of 640 acres instead of the 160 acres in the old leases.  I had hoped that Eclipse would treat the landowners fairly, in contrast to the Oxford way, but apparently not.  The landman, who called me, reminded (threatened?) me that Oxford (now Eclipse) is still drilling its shallow wells to hold them by production.  According to the DNR records almost all of these shallow wells have only the tiniest of production of oil or gas or sometimes only salt water or nothing.  My neighbors tell me that Oxford comes in, sets up a small rig and drills for a few days and leaves.

 

One leverage the landowners have by not signing the extension is to deny Eclipse the right to put together the necessary 640 acres to drill a deep well.  If enough people do not sign the extension maybe we could get a realistic offer. 

 

Has anyone on here received a similar extension "offer"?  Is anyone actually signing these things?  Does anyone know of any law suits or other methods to stop this bad faith drilling of the shallow wells?  

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Permalink Reply by Rob Rotz on July 30, 2013 at 2:42pm

Thanks Donna,  they told me to expect my Deep Well in Late 2014 but i think it will be sooner because my Neighbor's land is going in for a permit right now acording to eclipes.  I maybe part of that well and or will have my own soon.  I may have to change my Held Hostage handle to something more positive !!

Permalink Reply by David Cain on July 30, 2013 at 9:20pm

HH,

I'm glad for you HH.  Perhaps we will be part of the same unit since I am directly north of you.  Can you share what property is part of the new permit?  I am looking forward to hearing the results of the J Anderson well that Rex is drilling.  It is really close.

Regards, 

Dave Cain

Permalink Reply by Rob Rotz on July 31, 2013 at 9:15am

Hey David how are you ?  This is how it went down.. an eclipes landman stopped buy my amish neighbors house on Barker rd wanting to lease his ground. (he is already leased to Rex)  Paul asked why he wanted his land and the guy said they are permitting for the Pletcher well soon or right now.  That land is between you and me. it borders me and Axle. Paul, my neighbor made it a point to call me a couple days ago to tell me this news. i call ed pletcher and he had no idea this was happening.  Thats all i know, i hope they will contact us soon....

Permalink Reply by Trekker on July 30, 2013 at 6:17pm

Held Hostage,

You have made my day, month and years if you were given the correct information.  My land is in Wills and Madison Township, where is yours?  If Eclipse is really going to abandon the "shallow well" slight of hand trick, many landowners are going to celebrate.

If Eclipse wants to drill or include your land in a deep well, could it do so under your old lease?  Most of the old leases say that a maximum of 160 acres can be combined and 640 is needed for a deep well.  I would think that Eclipse would have to have you sign an amendment and/or extension to drill a deep well.  If that is the case, you should receive money the same as the latest offer for new leases.  In any extent, I wish you the best. 

Trekker

Permalink Reply by evan on July 30, 2013 at 8:03pm

640  acres is not needed f or a deep well . Its preferred but  doesnt have to be. I know of a few that are 400  and less that were and are being drilled . If a persons land lays just right and theres issues why they cant expand the unit they will drill with less than 640

Permalink Reply by Trekker on August 1, 2013 at 10:49am

Evan,

Thanks for the note.  You sound like you are involved in the oil and gas industry.  Is that the case?  Is there any minimum numbers of acres required by law or regulation or is it just a case of getting enough acres to make it worth the money to drill?  In any case what is smallest number of acres that you have heard of, that was used for a deep well?

Trekker

Permalink Reply by Rob Rotz on July 31, 2013 at 9:21am

Trekker,  believe me i all most fell over when the eclipse guy said that to me. im in millwood twnship near quaker city.  i think im only 160 ac max also, there will be some negociations comming soon i would imagine.  like i stated before i got a good vibe from the eclipse guy.....  looking forward to 2014    good luck to all EX OXFORD people ....

Permalink Reply by Michael Kasler on July 31, 2013 at 10:23am

HELD...I am leased with Eclipse in Guernsey County.  I would like to talk to their landman, any idea how I can get hold of him?  Thanks.

Permalink Reply by Rob Rotz on July 31, 2013 at 11:01am

private message me

Permalink Reply by Rob Rotz on July 31, 2013 at 3:07pm

QQQ

i sent you his info.  good luck.

Permalink Reply by Jeffrey Stoll on August 5, 2013 at 2:27pm

I emailed Marilou Wright, who works for Eclipse,and asked her if Oxford was still going to try and run in at the last second to drill some crappy well to hold by production or if Eclipse was going to be competitive with others and offer an upfront payment and better royalties to retain those leases. Here is her reply:

It is our intention to aggressively drill the Oxford acreage in Guernsey County.  Because of rig availability and the sheer number of acres Oxford has under lease, we obviously can’t drill all of it at once.  In some instances, we are asking for extensions.  There are also some conventional wells planned (in addition to the horizontal drilling we plan to do).  There are many things that affect drilling plans – proximity to pipeline, weather, lease expirations, water sources, etc. – so we are not always able to do what we want to do, where we want to do it or when we want to. 

Fundamentally, we intend to develop the Oxford acreage as fully as possible.  We are also working with other companies to pool our acreage with theirs.  Finally, we are trying to work with the landowners to develop the acreage.  We are hopeful to have as much landowner cooperation as possible as our common goal is to have up and running, producing oil and gas wells. 

So from this I assume 1) they are still going to drill shallow wells(conventional) 2) they are going to ask for extensions(probably $100 for 3 years as reported) if Oxford can't get to your property fast enough.  3) No mention of offering competive upfront payments plus decent royalties

My property is in Millwood twp, Guernsey Co.

 

Permalink Reply by Dodge Charger on August 2, 2013 at 10:50am

After re-reading the post on the conversation with Brett Marlow, something doesn't add up.  When he said "we have suspended all shallow drilling and if we do not get to you before your lease expires... (emphasis added)" he is contradicting himself, is he not?  If they have truly "suspended all shallow drilling", then how could they possibly "get to you before your lease expires"?  This statement implies that they might get to you before the end of your lease

Is it just me, or has anyone else interpreted the comment this way?

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