Replies to This Discussion

Permalink Reply by Nate on October 27, 2010 at 8:45am

Company B would be what my company does. We are small and can make a living drilling "shallow" wells and they still make the landowner a pretty penny. However when you start paying $1000 an acre those wells are no long economical. By leasing only what company A, or B for that matter wants. The landowner is increasing their properties potential revenue for getting more wells. Also it only takes around 40 acres to drill a clinton well so as long as you are not part of the chk farmout with a 1000 acre unit because you reserved your shallow rights, a Clinton well would be paying mostly you (or only you if you have more than 40 acres that is shaped where a well can be placed more than 500' from non leased property lines and at least 1000' from any existing well to the same horizon.

Permalink Reply by Richard Clark on October 27, 2010 at 8:58am

I know in Belmont county the Utica is about 12,000 ft deep and the Marcellus is about 7,000 ft deep but I don't know how deep the Clinton is, would you please tell me?

Ohio law is anything drilled over 4,000 ft deep requires a the 40ac you are refering to plus the other conditions.

Permalink Reply by Nate on October 27, 2010 at 9:46am

Richard In Tuscarawas county, specifically Dover/Phila area the Clinton is 5000' Where Dave is it is around 5100. Around Bowerston (NW Harrison County the Clinton is 6000'. It goes deeper as you go east, which is why the Marcellus is big in PA, it's deeper thus more mature in Pennsylvannia than in Ohio.

Permalink Reply by ryan norris on January 7, 2011 at 8:47pm

f Nate, I own 105 acres in trumbull county. i boought the land in 2006 and mineral rights and royalties came with it. these are clinton wells that were drilled in 1984 and are still producing. my question is: I have received an offer for marcellus from cobra, i am receiving royalties from NCL for the clinton wells drilled in 84. am i able to acept this offer or am i obligated to NCL?

Permalink Reply by Nate on January 8, 2011 at 12:35am

You most likely don't have anything to lease. Cobra is just a lazy landman going out spreading false hope without running titles. Read your original lease though.

Permalink Reply by Nate on October 27, 2010 at 8:39am

Lets say company B is CHK. They roll in with a sack full of money but say they can only lease it all or its over. This is where the negotiation comes in (It's not what it's worth, it's what you negotiate! hah). And this will answer Richard's question too. The odds of Chk wanting to farm out or let someone drill their Clinton formation (which are what over 90% of the wells are where they are leasing) is very low. However Clinton drillers are fine with just leasing the Clinton from a landowner and letting the landowner go out and make a different deal with whoever they want to lease with. I tell people this all the time and when they start to negotiate with the landman and he says "not possible" they landowner gets scared, like this guys going to go away or something, no matter that he's already leased up most of the twp and will not let you go that easy...

And my proof for this is CHK is out making deals with all the existing O&G companies in Ohio who have held by production acreage. That means a lease where there is a clinton well(s) and because they are producing the lease is active for as long as those wells are. CHK really just wants the Utica so they are making deals to get that from those producers and let them keep the Clinton. So why can't they make the same deal with a landowner who has a open lease???

Permalink Reply by David Mohn on October 27, 2010 at 8:55am

Thanks Nate. that is kinda of my point here. I have something the oil and gas companies want and that is land. the last time I read the wall street journal I didn't see where someone found a way to make more land. I will agree the gas companies have something I want too so I guess that is why leasing is a partnership. Both parties have something the other wants. I also understand that the Utica shale covers thousands of acres so if a person is too gready or unrealistic you might price yourself out of the game. Its a fine line between greed and being real on both parties. that is why I am trying to learn everything I can. You can read so much on the internet and I know bottom line is that I have to make a deal that I am comfortable with and live with it. What is right for one person may not make sense for another. I am also looking out for my kids since they will also have to live with this lease someday.
by the way, I am open to drilling for the Clinton HINT hint hint! LOL

Permalink Reply by Paul Martinelli on October 27, 2010 at 10:51am

Nate......Is CHK currently making a deal with you to drill to the UTICA formation on your leased land?

Also, I currently have production wells just East of New Phila., if CHK is making a deal with the lease holder....any idea on when we might see some action in this area (Tusc. County).

Thirdly......is it possible for someone like CHK to come in and just buy out the current lease holder completely?

Permalink Reply by David Mohn on October 27, 2010 at 10:57am

Paul, CHK is has offered a lease to me with fairly friendly landowers terms. When I tried to specify the drilling to the Marcellus shall I was told they were going deeper so I assume that was the Utica. The landman didn't have any idea when they would drill but did say they wanted the land leased so they could come in "soon". When soon is could be anybodys guess. soon might mean 5 years.

Permalink Reply by Paul Martinelli on October 27, 2010 at 11:20am

Nate/Anyone ..another question....if there is an existing well in production and CKH makes a deal with that O&G company to drill to the UTICA....isn't that just an end around to avaoid paying the upfront leasing bonus? I know consult O&G lawyer....

But it seams that the original lease most likely didn't cover the deeper formations....

Permalink Reply by Nate on October 27, 2010 at 11:41am

We are talking to a couple of players, CHK being one of them. THey are interested in our deep rights in Tusc, stark, harrison, and carroll counties. Paul do you own the wells east of New Phila? or do you own the land that the wells are on? When it comes to how they deal with current producers they don't want what is holding the lease, they are interested in the rights to the formations below the Clinton.

Permalink Reply by Paul Martinelli on October 27, 2010 at 12:50pm

I own the land....I belive Tipka and Investco (used to be Range Resources) own/operate the wells.

Your name is familiar......possibly your company owns/runs well Glass #4 that i get a miniscule Royalty from.

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