a question about the status of already leased property

In my area many property owners have leased their lands in the 1970's for storage purposes. The payments were extremely small.

Two different landmen came to my door looking to lease my property late last summer. I was told they could not find any record of it being leased. However we made a couple of phone calls and eventually found that it was indeed leased until 2099 I think it was.

Now what options do I have to pry the very low lease payments to a better deal if any?

Something was said that these new marcellus drilling companies were trying to make some sort of deal to either drill thru the storage areas to the deep marcellus shale deposits or buy up these low paying leases from Dominion

William L.

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Permalink Reply by Toby Rice on March 28, 2009 at 11:49am
William,
It is possible to drill a Marcellus well in a gas storage field, however, drilling is lined with red tape and requires cooperation from the company which operates the storage field (in your case Dominion). If you're stuck in a gas storage lease, you're going to be stuck in that lease, meaning your best shot at getting a well is from the operator who operates the storage field. Now, Dominion was not too interested in drilling Marcellus wells, but they have drilled a few, but more importantly, they did a deal with Anterro Resources late summer (closed Sept. 31 i think), Dominion gave Anterro the rights to drill on 114,000 acres in exchange for an override and a $3,000+ per acre drilling commitment. This means that Anterro will be spending 347 MM in drilling in the upcoming years. I would try and find out if your acreage was included in the farm out to Anterro- if so- be nice so that the oil comapny will lean your way and spot a well in your unit!
Permalink Reply by William Ladd on March 28, 2009 at 12:42pm
I thank you Toby very much for your information. I am located in the north western part of Tioga county of Pennsylvania. In fact there is a Dominion pumping station within about 3 miles as the crow flies from where I am located.

In the last year there have been at least three wells drilled within this 3 mile area. I do not know who the drilling was done by however. But they were drilled within a mile or closer to the pumping station.

So I guess I will have wait to see if someone comes around again.

But it looks as if Dominion might want to sell their leases to other outfits. I have not found out if my property is part of Anterro acreage or not as yet.

Bill L.

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