Replies to This Discussion

Permalink Reply by Two Dogs on October 3, 2010 at 4:19am

I think that PA would be wise to look at the way Louisiana does it. In LA if you don't lease you become a working interest partner in the well, more or less. If they bring a well in you have the choice of paying your share (per acre) of the costs and getting paid your interest at 100% less operating costs or wait until the well hits pay out and get your 100% share minus operating costs. In LA we call this "Riding the well down". Most companies don't want this to happen, so they will up the price before they bring the well in or after they bring the well in. If you are a large mineral owner this could stop the drilling project until they deal with you own your terms. The pros and cons of this have been hashed out in depth on www.gohaynesvilleshale.com, just search Forced Pooling on the website.

Permalink Reply by Ann Ticopa on October 3, 2010 at 5:49am

The one piece of draft PA forced pooling legislation that did become public did have a profit-sharing option. But, the non-participating landowner would get a proportional share of the profits only after "paying" a 400% risk penalty. Since there would be no bonus or royalty paid, it could be a long wait to see any money.

Is it correct that in LA production units conform to section boundaries? If so, that's another difference. There are no sections in PA. So, gascos have flexibility in how they lay out their production units.and can space-out unleased properties.

Permalink Reply by Two Dogs on October 3, 2010 at 8:01am

Many of the Haynesville units have paid out quickly but from my understanding they produce way more gas than the Marcellus. In Louisiana most cases the Haynesville units are 640 acres that take in each section. When you get close to rivers sections become all shapes and sizes but the companies seem to be keeping the 640 acre square. Some of the companies have tried to make the units larger, but were unsuccessful due to the public outcry. There will be some instances where units will be larger or maybe smaller, like around cities, some of the larger lakes and rivers and also around fault lines. The main thing about the unit is that it needs to be fair to the mineral owners. Here we notify everyone in the unit and in a forty square acre perimeter around the unit along with a plat map of the unit, that a meeting will take place that would discuss force pooling of those within the unit. Texas doesn't have sections and seem to do well with the way they form units. As per the Haynesville in Louisiana the idea is to drill 8 horizontal wells per section, we also have the Bossier formation that sits atop of the Haynesville, that in some cases may prove to be more productive than the Haynesville. In that case 8 more wells could be drilled into the Bossier. Tests have also been conducted in the upper Smackover, which lies below the Haynesville, that in some instances may be very productive also. Most of these formations are included in a Haynesville lease.
The people of PA need to get it right as fast as they can because these shale plays are just an infant at present but will grow to be monsters in no time. Northwest Louisiana and East Texas are booming at present.

Permalink Reply by Ann Ticopa on October 3, 2010 at 10:38am

The people of PA need to get it right as fast as they can because these shale plays are just an infant at present but will grow to be monsters in no time.

I have this photo at the Shreveport Times bookmarked to remind me.
"Pad sites from the Haynesville Shale are seen from the air in the area of south Bossier Parish and Lake Bistineau."
http://tinyurl.com/38zozxa

Permalink Reply by Two Dogs on October 3, 2010 at 11:15am

Ann it ain't pretty in places and I can understand where the nature lovers of the Northeast will come from in their battle to protect the environment. We don't seem to have to much of a problem in LA with that. The North and South lines of most sections in Northwest LA will look like a giant pipeline right-of-way running between sections from the air except there will be no green only gray to white drillsites of about 10 acres each. You will also have pipeline ROW's running all over. This is something that the folks need to think about.

Permalink Reply by Brian Oram, PG on October 3, 2010 at 9:44am

It would seem to make sense that a group with an interest for the royality owners and surface rights owners attempt to draft the necessary language and not the gas companies or our politicians.

Permalink Reply by Two Dogs on October 3, 2010 at 12:39pm

Brian, I agree with your point but our greedy politicians will stick their nose into the play. You just need to organize on this web site and voice your opinion. Go to their meetings and fight for your great great grandchildren's rights.