ABILITY TO BYPASS UNLEASED PROPERTY

     I have six acres in Carroll County. I have been requested by Chesapeak to modify an old lease on my property to increase the  size of the drilling unit. I asked in exchange that they  increase the 12.5%  royalty  but they refused.   They say they can go around me as long as the drill bore is 500feet from my property line.  My question is can they do this.  Does the horizontal drilling bore just go in a straight line or can they steer the bore around a property that has no lease. If it only goes in a straight line,  it seems my bargaining power goes up as my property would block those behind me. 

   

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Permalink Reply by Billy Park Whyde on January 18, 2012 at 1:12pm

Can they really go around you, that's a good question. From what I have seen any curvature or radius they create is a gradual turn. Depending on your property layout in relationship to their ultimate point would be a question your property a thin rectangle broadside to their drill path? If so it might be a pain. See what they landowners are getting they are going to drill on, find out if they can go around you, do they have the lease to property surrounding you? 

Permalink Reply by Philip Brutz on January 18, 2012 at 1:34pm

They can and will drill around you.  I have attached a couple of Google Earth maps of CHK wells that take  odd bends.  You will need Google Earth installed on your computer to view them.  Talk to your neighbors, if  they have receive similar letters try and negotiate together. Do not sign anything that you do not understand.  I would not sign a lease that had the words "convert to gas storage" or "waste disposal injection well" in it.

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Permalink Reply by Mike h on January 19, 2012 at 2:54am

Mark,

 

I've never heard of ODNR forcing a company to include a landowner they haven't been able to reach ana greement with. This would be something along the lines of reverse forced pooling. Can you provide citations for this? ODNR regulation(s)? Case Law?

Permalink Reply by Mike h on January 19, 2012 at 3:36am

The what did you mean by your statement?:

 

"They can't continue to drill around you and leave your property as an island; the ODNR won't allow it."

Permalink Reply by Philip Brutz on January 19, 2012 at 4:03am

The problem is it is only 6 acres.  Unless they join forces with the neighbors they don't have much bargaining power.   

Permalink Reply by Billy Park Whyde on January 19, 2012 at 4:25am

Question is is it worth the fight? Using the just the oil royalty calculator here at GOM i plugged in a 640 acre drilling unit, having 6 acres at a royalty percentage of 12.5% and 17.0% and through in  a figure of 1000 barrels a day production (this is just for a BIG BALL PARK FIGURE WITH NO DEPLETION OR ANY OTHER CONSIDERATIONS INCLUDING GAS ROYALTY.) at 17.0 it would be  

17% = $  12.5% = $ 

Personally I think an attorney would be worth the price, I think they contacted you because they had to, not out of the kindness of their heart.  What saith the jury here? 

  

Permalink Reply by Billy Park Whyde on January 19, 2012 at 4:59am

Question is is it worth the fight? Using the just the oil royalty calculator here at GOM i plugged in a 640 acre drilling unit, @ $100/bbl, having 6 acres at a royalty percentage of 12.5% and 17.0% and threw in  a figure of 1000 barrels a day production (this is just for a BIG BALL PARK FIGURE WITH NO DEPLETION OR ANY OTHER CONSIDERATIONS INCLUDING GAS ROYALTY.) 

 17% = $58,171  at 12.5% = $42,773 difference $15,398 the first year 

Personally I think an attorney would be worth the price, I think they contacted you because they had to, not out of the kindness of their heart.  What saith the jury here? 

Permalink Reply by Bill anders on January 19, 2012 at 4:24am

not going to get too much leverage with 6 acres.

Permalink Reply by Billy Park Whyde on January 19, 2012 at 5:01am

I guess it would be!

Permalink Reply by Marinell on January 19, 2012 at 7:05am

Especially since they are watching YOU on this blog!

Permalink Reply by Henry W K III on January 19, 2012 at 10:20am

I thought of that. 

Permalink Reply by Paul Martinelli on January 19, 2012 at 6:58am

I disagree....

 

Hold your ground.....they will make you a better offer......they don't want to go around you.

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