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 Paul Randles on February 24, 2014 at 7:00am

Tree Farmer..after reading the amendment again, there is nothing in writing about the 17%, or the cash per acre for that matter...seems a little fishy doesn't it...Vine royalty has been in contact with me, and as I understand, they are associated with Eclipse...anyway, I have taken this info to be reviewed by a lawyer..If nothing comes of it, well,I;m really not out anything...but...I'm not signing the amendment without legal counsel..we'll just have to wait and see.

 

Permalink Reply by Tony Yurina on February 24, 2014 at 3:40pm

Paul,

Does Eclipse have the deep rights below the clinton sand per the original Oxford lease?

Did Eclipse try to increase the unit size as per the amendment?

Permalink Reply by Paul Randles on March 5, 2014 at 12:31pm

Tony, not zone specific, my lease reads "for oil and gas exploration"...and to answer your second question..the amendent is to increase the unit,,640 acres...Paul

Permalink Reply by maag man on February 7, 2014 at 3:54am

bullshit...  the amendments allow them to pool you with other acreage you don't touch.. therefore allowing them to hold.. realize this is funded by EndCap.. endcap is a flipping company only.. the longer they can hold you the easier it is to sell.. and just because you end up in a 1280 unit.. doesn't mean you will get more wells.. that actually means they can drill one well and hold larger acreage..  this is a 30 yr play...  can you wait it out.. 

Permalink Reply by BIG on February 7, 2014 at 7:44am

I would be careful in saying that a 1280/acre unit is only going to have one well.  Yes, it could only contain one well, but I would think that the oil and gas companies want to develop all the wells.  They are spending millions on just the pad site.  In Carroll County Chesapeake has 1280/acre units and has developed 6-8 wells in each of there units according to the ODNR.  It appears some of the 1280's only have one, but again I would assume they will be coming back to drill those when rigs become available.

I thought Eclipse was a private company and they received funding from EnCap.  I would assume at some point Eclipse will pay back the funding or take their company public and let Encap have a piece of it.  EnCap is involved in all kinds of oil and gas ventures.

Permalink Reply by Tom on February 7, 2014 at 1:29pm
I agree with you about Carroll County. I think the only reason they pulled out of Carroll was to come south and get into the oil before all the other companies got all of the acrage leased. After they develope our area, they'll go back to the north. They are not going to let all of that money go to waste by not drilling it. I think even though we are seeing outragious amounts of gas from these wells, the global demand for natural gas is only going to increase over the years.

And as far as Eclipse goes, the landman who did my lease told me they want to go public later this year. So, whether or not they pay back Encap or not, I can't say. But it is in their best interest to have as many wells producing as possible and producing as much as possible...it will look better for potential investors.
Permalink Reply by BIG on February 8, 2014 at 9:47am

I have mentioned a few times that smaller spacing was being tested.  See the post regarding "Super Tight Spacing" in Carroll County.  This could eliminate any need to amend the old 160/acre unitization leases.  Do not be surprised if the money that is being offered on amendments starts to go away.   

Permalink Reply by FRED SAVAGE on February 21, 2014 at 6:33pm

We leased to Eclipse. In Nov. 2012, they told me they could drill on a landowner with 8 acres. MARCH 2013, An Antero land man came to talk, I said we are Eclipse, he said I work for both. He said when pipe lines are in place, and they could get more drilling rigs ( 15 ) by 2014, then they would do some serious drilling. I, myself worked in the oilfields for over 15 years in OH., PA., W. VA. AND NEW YORK.  We trust them.  He said he would be back to talk to us in middle -- to late 2014. I misplaced his business card, I can't remember his name.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Permalink Reply by maag man on February 23, 2014 at 1:12pm

that land man is full of shit..  160 acre min for horizontal.. 20 acre min for shallow well

Permalink Reply by maag man on February 23, 2014 at 1:11pm

read the business model of Encap   sell,  flip,  etc..   and who do you know that is receiving royalties from Chesapeake??    what you see on odnr isn't truthful  ODNR may show possible well sites but not completed...and no infrastructure..     IF you don't have a good business partner in your well.. you are screwed.. land owners cant compete    and no lawyer is going to help you

Permalink Reply by WranglerRouser on February 24, 2014 at 5:27am

The ODNR is in bed with the O&G companies and their lobbyists.  You can't trust them any farther than you could throw them either!

Memo reveals ODNR had planned to support fracking and wage PR campaign

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