Replies to This Discussion

Permalink Reply by Lynn Wigglesworth on September 15, 2010 at 10:33am

But then what? If East won't make a decent offer now, why would they pay more to buy that lease? Or will Jim Bob have a great lease and not EVER be included in a unit or collect royalties? East can EASILY go around less than 3 acres...with more acreage it gets 'iffy-er' but it's still possible that East won't be willing to take on a good lease with higher royalty.

Permalink Reply by Brian Day on October 28, 2010 at 6:17am

Each well constitutes a unit. Six wells from one pad constitute six differrent units. With pugh clauses, which some old East leases do have, land outside the individual well unit would still be available for leasing. If the pad isn't on your land and the bore doesn't run beneath it, your landis free at the end of the leae term or after the unit is declared. If it is a single vertical well, it should only hold a circular unit of perhaps 300 yards diameter in theory. If the gas company wants to hold a bigger piece of land, then they should drill all horizontals at each pad and get a pipeline to them. Otherwise, it seems like a form of fraud to me.

Permalink Reply by Lynn Wigglesworth on October 28, 2010 at 7:59am

Josie; that is also my understanding of what is happening. And, fair or not, East IS holding 640 acre units with one vertical well, not producing..the units have been declared, and the plan is to come back (someday) and put in 6 horizontals IN THAT UNIT, from that pad. I don't know if anyone has challenged it, but I know for a fact that they are doing it.

East wants to include me in such a unit; the vertical was drilled over 2 years ago and the pipeline hasn't even been started in this area. It could be years before they finish the horizontals, put in the pipeline, and produce anything, but most of the unit is being held at $5/acre/year. According to the East lease I've read, that's all perfectly legal.

Permalink Reply by Lynn Wigglesworth on October 28, 2010 at 9:03am

I've heard from several places that even though the deal is done, Shell's 'take over' of East won't be complete until January. Maybe things will change? I'm hoping Shell won't put up with East's tactics and will start throwing a little more money around to get the wells and pipelines in and fill in the units. If they made me a decent offer, I'd love to sign and be in their unit. Their threats haven't done anything but made me more stubborn.

Permalink Reply by Lynn Wigglesworth on October 28, 2010 at 9:52am

I agree; Shell hasn't made it's presence known; I believe that they are staying completely out of it. East continues on as it always has. I've only heard rumors/mentions here and there that Shell will get more involved come January. Maybe they are still waiting to see what happens with the election, with Rendell making deals, when the legislature gets going again, etc.

Permalink Reply by Ann Ticopa on October 28, 2010 at 11:11am

Shell bought East as an investment, not to extract/sell the gas at fire sale prices. I don't see how TC could be the "Gas Capitol"; the shale isn't as thick as in other northern counties and it's not the preferred "wet" gas found in SW PA.

Permalink Reply by Ann Ticopa on October 28, 2010 at 12:33pm

It was a chance for them to get a lot of shale gas and they could afford it. But they can't just sit on undrilled land forever, so it will be interesting to see if they drill to hold leases (as East has done), let some leases go, and/or sell some of their holdings.

Permalink Reply by Scott Wilcox on October 28, 2010 at 12:47pm

Just catching up to this thread. Great to see the activity! A couple of observation I believe to be true.
Shell is just recently bring their people here to relocate and are actively looking for residential real estate to purchase (not to just rent).
Royalties are being paid in Tioga county in Richmond township, Charleston township, and other townships east of Mansfield near Mainesburg and Covington. These wells are much closer to the existing Tennessee Line. (There is a proposal to install another 30" line in their existing ROW)
Also a question. Could there be a natural gas glut presently? Low demand? $3.50 + or - per 1000 cubic feet at the well head may not be profitable at the present time. Exploratory vertical wells to measure quantity and quality then shut-in. Secure pipe line ROW. Then wait. That seems to be the norm at present. Revenue from wells near the Tennessee main line must be enough to kept them going?

Permalink Reply by Ann Ticopa on October 28, 2010 at 10:57am

That's the WV part of the deal that isn't complete until January.

From a Shell website:

"1. When is the sale of East Resources to Shell complete?

The sale of East Resources, Inc. (ERI) assets was completed on July 29, 2010, and operational control of those assets is now under the ownership of East Resources Management, LLC or ERM (a newly created, wholly owned affiliate of Shell Oil Company). This sale did not include ERI’s West Virginia oil & gas assets, which is the subject of a separate transaction. Effective July 29, 2010, Shell will operate and issue contracts under the name of East Resources Management, LLC. "
http://www.uacontractor.com/east/faqs/index.php

Permalink Reply by Ann Ticopa on October 29, 2010 at 3:04am

I just checked three East/Shell leases offered this year. The one from Feb says East Resources, Inc (ERI) and the ones from July and August say East Resources Management (ERM).

Permalink Reply by paleface on October 28, 2010 at 10:08am

Shut in and held by prodution are becoming the same thing?

Permalink Reply by Lynn Wigglesworth on October 28, 2010 at 11:10am

East is holding thousands of acres with non-producing (shut-in) wells.

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