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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I have leases signed for parcels in both Carroll and Harrison Counties in 2011, each a standard lease as offered by the O & G company and while attempted, there was little ability to negotiate for better terms.  The size of the parcels were relatively small and thus very little to bargain with.  WIth the collective resources of professional representation and a larger group of parcels combined from different landowners, a land group can work with the O & G companies on more equal terms than each smaller landowner can individually.  We also have additional acreage in Tuscarawas County that is presently HBP.

Our property in Guernsey County is considerably larger and while we have contacted and spoken with serveral O & G companies, we have remained unleased.  Our hope is that with the Landowner Group we can obtain not only a lease, but a good lease with our interests as a landowner taken into account (financial and property protection).  Sometimes a relatively small item in a lease can have a big impact, and with representation geared toward the landowner, hopefully any detrimental pitfalls that may occur in the future can be avoided.  There are a lot of good stories out there ... as well as bad stories.  Given the numbers that are being dealt with and what can be at stake, proper representation and advice from a knowledgable group can be well worth the one-time cost in LLG or another source.

While I am up on a variety of things with the issue, my knowledge base is still quite limited in comparison to many folk and the professionals among us.  I have no problem associating with that which may be advantageous and utilizing the resources when available and appropriate.

Have you signed any leases, negotiated or do you have any other experience or dealing in leasing individually or through a landowner group?  Do you have any other suggestions or recommendations?  I'd appreciate any imput you would like to share.

We were part of the Guernsey KWGD landowners group that signed with Gulport 2 years ago.  We were very happy with the lease and the deal that KWGD negotiated.  But the time of big landowner groups has pasted in our part of Guernsey. I checked the ODNR gas and oil well viewer and the https://www.uslandrecords.com/ohlr/ land records for your neighbors and it looks like many of them signed with SWEPI which sold the leases to American Energy Utica.  You may want to get a good oil and gas lawyer and negotiate directly with them.  

Best Philip

We have multiple SWEPI (American Energy Utica) parcels adjoining our property to the north, south and at our southwest corner as well as Gulfport adjoining to the east so would hope to have some possibilities by our location.  We've tried (more than once) to contact American Energy without success and have had contact with several other O & G companies but without lease success so are going to work with 'Landowners Leasing Group'.  They've had several presentations recently in the area (Harrison Co, Salt Fork, St. Clairsville, Woodsfield) and see a bright prospect for the area.  They have legal, financial, real estate and other resources at their disposal and hopefully by associating with additional landowners (and acreage) will be in a better position to negotiate than smaller individuals on their own.  We have over 103 contiguous acres available so have both a financial and surface protection interest in any lease we sign.

It's great to hear of your KWGD experience and we appreciate your input.

Art,

I met with Ryan Dean, the Senior Manager- Coporate Development for AEP Utica who, by the way, came from Chesapeake. When asked if leases would be gross or net, he answered net. If folks can get a better deal going through a Land Owners group to lease with AEP Utica, that would be the way to go.

We have net on our present (2011) Chesapeake leases which was all they were offering.  LLG has been negotiating a signing bonus between $5,000 - $7,200 an acre with royalties between 18% - 20% gross and I would very much prefer the gross over the net.  You can't blame the O & G companies for looking out for their interests first and that's simply (good?) business.

Given that there are leases with both net & gross, I'd like to work with a group that focuses on getting the gross (i.e. more $$ with less deductions chipping away).  We haven't reached the point of receiving royalties on our present leases yet so will be interested in seeing what transpires in that aspect.

U maybe right in your thinking just as long as they don't jump into bed with them!!??

I want to pass along to all landowners with an Oxford (Eclipse) lease the holding of a recent Court Of Common Pleas in Belmont County.  Oxford had sued a landowner Barry West et al to enforce its right to drill one of its famous shallow, vertical wells.  The lease had the usual hold by production clause that let Oxford hold the land indefinitely if it had any production, in the opinion of Oxford.  The judge held that the lease was invalid on its face because it effectively ran in "perpetuity", i.e. forever. 

 

I would guess that the hbp clause is in all of Oxford's leases (it is in mine), which could mean that they are all invalid.  WOW, Oxford must be having a fit.  But this case will surely go to the Court of Appeals and maybe to the Ohio Supreme Court which could take years.  In any event the case should make Eclipse try to sign up extensions or new leases with its old lease holders at market rates.  Let's cross our fingers.  If you have any legal questions talk to a good oil and gas lawyer.

 

Trekker

Trekker,

I think if your right in the second part then there be lots people that will not get resigned! And left for the wolfs of the small companies to fight it out to try get into the play in some area's! Just my Opinion!  

But I guess time will tell how much money eclipse really has! Will they pay top/rates or still try weasel everyone to get what they need back!...lol I do have to say before they acquired all these lease they paid early on they're upfront bonus money.

Don't sign with them, that is your choice. Let someone else come to u. Get the best deal u can still be very carefull who u trust.

Dotte3
Get the going rate of money in your area. See an attorney. We did not and we r really suffering for that. We didnt get the right wording in our paper work when we sold our land. We thought we said the right thing about mineral rights but we didn't, now we r crying over spilt milk. SEE an Attorney.
Good Luck in the future.

Dotte3

I was with a fellow land owner in noble county where the lawyer is attempting to gain 33% of that landowners bonus and lease...  if a lawyer works for you.. reviewing the contract should be no more than a couple hundred dollars.....

C mon Mick, thats just bullcrap. Crawl back under your rock......

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