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Permalink Reply by Jim Litwinowicz on September 29, 2011 at 10:06pm

I have run in to some people with the same issue.  Once they ask for any change, that opens the door for more changes.  The question becomes how bad do they want it and how many changes will they allow?

 

I suggested you and your family make a list of all important addendum and then prioritize them as to which are more important. One of the most important is no compressor stations and/or ancillary equipment. or storage ponds. No gas storage, either.

 

Much of how you prioritize the list depends on how many acres you have and how you use the land.  If you only have five with a house on it, the obviously won't drill on your property.

 

How much money will they grant? $500/acre? $1000/acre? hard to say, all depends on how bad they want.

 

Be very patient, allow them to sit for weeks at a time, unless they give you all you ask for...lol

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Permalink Reply by craig on September 30, 2011 at 10:45pm

Hi Missy,

Another item that you should know when dealing with an amendment such as you are considering....

In our area an addendum was presented to some of us with old gas leases which would effectively allow the unit declared to include partial acreage of a parcel.  With our old lease they had to include all acreage of the parcel in a unit, but with the addendum they can include any amount of the acreage, yes even down to 4/10 or less of one acre to hold the whole parcel by production. What that means is that they can put part of your land in a unit and you get royalties on that small part, hold the rest by production(no royalties) which bars you from re-leasing when the term limit expires of your lease.

The upside is that they are drilling right next to you, probably sooner than they might without the addendum and they will be drilling the rest of your property in the future sometime.

There's two sides to every coin. CHK in our area has be reluctant to negotiate a payment for us to sign the addendum...and the reason most won't sign it is because our leases start running out this winter/spring. Why would we sign for nothing, when 6 months or so from now they ( or someone) will re-lease us?

Choose carefully, and good luck!

 

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