Replies to This Discussion

Permalink Reply by JOE REDDING on January 7, 2016 at 3:29am

5% of 100% just ballpark.

Permalink Reply by Jack Young on January 7, 2016 at 4:32am

Chesapeake has claimed expenses of more than 100% on some wells recently - plenty of gas is flowing yet they are paying zero royalty. Shell is more honest, but this certainly isn't an issue one should ignore lightly.

Permalink Reply by Matt Lanctot on August 31, 2016 at 9:09am

I've seen royalty statements with upwards of 75% deductions, sadly.   take a lower royalty % if you have to, but definitely have a gross "no-deduction" lease. 

Permalink Reply by Jesse V. on January 6, 2016 at 3:53am

I'm curious as to why Shell has been able to hold countless wells by production that in most cases is not even possible because a good number of these older ones have only a vertical initial well drilled on them. I've had conversations with people that have been unitized since as far back as 2009 without ever being paid a single royalty. It is obvious they are holding all of this acreage without doing a single thing to complete or hook up these units to a pipeline.

I assume they are making a minimum rental payment to maintain these leases without royalty but I just don't get how they can keep these units and not have to surrender them. Can this not be challenged legally? This seems wrong on so many levels.  

Permalink Reply by Roy Siefert on January 6, 2016 at 12:53pm

It depends on what your lease says for drilled wells and also for shut in wells, as that is usually in a different clause. How many times do we need to say every lease is different especially having to do with addendums. Class action doesn't work when every lease is different. Check with the Penn State Cooperative Extension if you are willing to actually show your lease to someone. They won't give you legal advice, your attorney needs to do that, but they may be willing to say you should see a lawyer.

Permalink Reply by Jesse V. on January 7, 2016 at 7:18am

If just one lease within a well had the "correct language" it would either force the hand of the operator or it would get that Lease removed from the unit I suppose. Then again if there is a well bore under your property they can't remove you.

Permalink Reply by JOE REDDING on January 7, 2016 at 10:08am

Jesse, that is not the way it works each lease has to be worked out with you and the operator, evryone can negotiate his own terms the unit is comprised of all in the unit each different.

Permalink Reply by Lynn Wigglesworth on January 8, 2016 at 7:33am

When I signed the original lease, Swepi gave me a lot of their Addenda (no deduction, no surface disturbance, etc). 15% royalty was standard at the time. They didn't allow any leeway in the wording of the lease itself, and I could only ask for the Addenda that they had already written. Did other people get a deal considerably different than that? Today they aren't allowing much of anything...take it or leave it. These gas company dealings all seem so shady and hush-hush. No one talks about them.

Permalink Reply by Lynn Wigglesworth on January 8, 2016 at 6:47am

Are all leases different? Shell uses a boiler-plate lease with a few available addenda that they write. I've never heard of anyone being allowed to rewrite the lease or add an addendum that isn't one of Shell's. Have people been able to change the wording of a Shell lease?

Permalink Reply by Ann Ticopa on January 7, 2016 at 6:00am

imo, enough people have convinced themselves that SWEPI is their only chance to cash in, it would be difficult to get support to  "rocking the boat".  Although there is probably nothing that can be done about existing leases that allow taking the actual royalty below 12.5%, what's the PA legislators' excuse for not  passing a corrective law that applies to future leases? 

Permalink Reply by Ann Ticopa on January 8, 2016 at 4:18am

"Azure Midstream, Travis Peak Resources" - NGI Staff Reports - January 4, 2016

"A new exploration and production company, Travis Peak Resources LLC, recently secured drilling permits in north-central Pennsylvania in an area where other companies are testing the Utica Shale. Austin, TX-based Travis Peak received three permits between October and November from the Pennsylvania Department of Environmental Protection to drill horizontal wells in Westfield Township, Tioga County. In recent years, Seneca Resources Corp. and a Royal Dutch Shell plc subsidiary have tested successful Utica wells in the area, where the formation is deeper than it is farther to the west (see Shale Daily, Oct. 13, 2015; Nov. 24, 2014). Travis Peak, which partnered with the private equity firmEnCap Investments LP in 2013, also has interests in the Permian Basin, the Midcontinent and along the Gulf Coast. The company entered the Appalachian Basin in 2014 looking to lease land for Utica development, according to local news media reports at the time. It's unclear if the company has started to drill in Tioga County or if it plans to soon."

http://www.naturalgasintel.com/articles/104892-briefs----azure-mids...

ABPLANALP 1H - 117-21811 - 11/2/2015
http://www.ahs.dep.pa.gov/eFACTSWeb/searchResults_singleAuth.aspx?A...

ABPLANALP 2H - 117-21812 - 11/2/2015
http://www.ahs.dep.pa.gov/eFACTSWeb/searchResults_singleAuth.aspx?A...

PAINTER 1H -117-21813 - 10/22/2015 - Spud Date: 12/15/2015
http://www.ahs.dep.pa.gov/eFACTSWeb/searchResults_singleAuth.aspx?A...

Permalink Reply by Janice L. Hancharick on January 16, 2016 at 7:56am

Travis Peak also has a presence in Potter.  Several members of the 4-County Landowners Group which covers a portion of western Tioga and is established throughout Potter, McKean, and into Cameron did get solid leases w/Travis Peak.  The firm's plan to develop Utica allowed for a better deal than what JKLM and SWEPI were offering @ the time ... not heavy-handed industry boiler plate specials.

Utica will be a success story for whatever company chooses to drill it, if done right.  Keeping an eye on what's happening abroad will help landowners understand what's coming to their back yard.

Good comments, Ann

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