confused on current gas lease versus bonus money - GoMarcellusShale.com2024-03-29T10:36:51Zhttps://gomarcellusshale.com/forum/topics/confused-on-current-gas-lease-versus-bonus-money?commentId=2274639%3AComment%3A218835&feed=yes&xn_auth=noBill,
Don't assume because so…tag:gomarcellusshale.com,2012-09-07:2274639:Comment:3423822012-09-07T16:19:35.086ZGunner Ostergardhttps://gomarcellusshale.com/profile/NinaCatanzarite
<p>Bill,</p>
<p>Don't assume because someone is sending out a check, it does not mean the well is producing, it just means a check is being sent out. The well needs to be tested for production and the state agency needs to be contacted for the required production reporting.</p>
<p>Bill,</p>
<p>Don't assume because someone is sending out a check, it does not mean the well is producing, it just means a check is being sent out. The well needs to be tested for production and the state agency needs to be contacted for the required production reporting.</p> here is a link to a recent Pa…tag:gomarcellusshale.com,2012-01-07:2274639:Comment:2209302012-01-07T00:57:28.367ZBerkhttps://gomarcellusshale.com/profile/BerkBossard
<p>here is a link to a recent Pa ruling maybe this will be of some help to someone.</p>
<p><a href="http://www.hh-law.com/News/20111103-Non-ProductionDuringSecondaryTermResultsinTerminationofLease.aspx">http://www.hh-law.com/News/20111103-Non-ProductionDuringSecondaryTermResultsinTerminationofLease.aspx</a></p>
<p> </p>
<p>Berk</p>
<p>here is a link to a recent Pa ruling maybe this will be of some help to someone.</p>
<p><a href="http://www.hh-law.com/News/20111103-Non-ProductionDuringSecondaryTermResultsinTerminationofLease.aspx">http://www.hh-law.com/News/20111103-Non-ProductionDuringSecondaryTermResultsinTerminationofLease.aspx</a></p>
<p> </p>
<p>Berk</p> Keith, so, I should be expect…tag:gomarcellusshale.com,2012-01-06:2274639:Comment:2206012012-01-06T20:03:52.150ZMartin J Huthhttps://gomarcellusshale.com/profile/MartinJHuth
<p>Keith, so, I should be expecting my denial any week now....but we shall see...thanks</p>
<p>Keith, so, I should be expecting my denial any week now....but we shall see...thanks</p> VG, I think this may be part…tag:gomarcellusshale.com,2012-01-06:2274639:Comment:2208352012-01-06T20:00:45.739ZMartin J Huthhttps://gomarcellusshale.com/profile/MartinJHuth
<p>VG, I think this may be part of the delay as they are trying to make a decision on what to do....I shall provide an update as soon as I hear anything new. Marty</p>
<p>VG, I think this may be part of the delay as they are trying to make a decision on what to do....I shall provide an update as soon as I hear anything new. Marty</p> Martin,
we signed on Sept. 14…tag:gomarcellusshale.com,2012-01-06:2274639:Comment:2208342012-01-06T19:40:32.029ZKeith Travishttps://gomarcellusshale.com/profile/KeithTravis
<p>Martin,</p>
<p>we signed on Sept. 14, and the denial letter is dated Dec. 1, but we didn't get it until the middle of December. While I knew not to count the money until the check was cashed, it was still kind of a disapointment for me. We had spent several months before signing thinking things were being checked out, and the landman said the old well would be no problem. I've been studying and talking to anyone that might have some experience, and I don't know what to do next. In…</p>
<p>Martin,</p>
<p>we signed on Sept. 14, and the denial letter is dated Dec. 1, but we didn't get it until the middle of December. While I knew not to count the money until the check was cashed, it was still kind of a disapointment for me. We had spent several months before signing thinking things were being checked out, and the landman said the old well would be no problem. I've been studying and talking to anyone that might have some experience, and I don't know what to do next. In reading my old lease (I should have done that before last September, because I forgot a lot from when it was signed in 1984), I am entitled to annual delay payments when they don't sell any product commercially, but I have to notify them in writing to get it. I did not do that.Old lease also has a no pooling clause and is for 40 acres. I think Enervest is going to have to talk to me about that. I had a man tell me they did me a favor by turning me down, the bonus payments will go up when the new well proves whats down there .So it's patience for now, waiting to see what's next.</p> thank you Jack, that was info…tag:gomarcellusshale.com,2012-01-06:2274639:Comment:2208292012-01-06T18:37:17.008Z0l1a6laz7smpfhttps://gomarcellusshale.com/xn/detail/u_0l1a6laz7smpf
<p>thank you Jack, that was info that not only made sense but is appreciated.</p>
<p>those kind of situations like the oil company keeping the well with some though little production rather than pay out thousands to plug it helps us all to understand better. Why the oil companies don't freely explain all this to landowners in some way doesn't make sense...of course you said that some use it to show they have a legal right to hold the lease......and I think that some landowners/Lessors might…</p>
<p>thank you Jack, that was info that not only made sense but is appreciated.</p>
<p>those kind of situations like the oil company keeping the well with some though little production rather than pay out thousands to plug it helps us all to understand better. Why the oil companies don't freely explain all this to landowners in some way doesn't make sense...of course you said that some use it to show they have a legal right to hold the lease......and I think that some landowners/Lessors might complain if they knew the situation and still insist on plugging the well...it it were possible. I think the best for them in this case is to honor the new lease with the Lessor (such as Martin has in his hand) and go forward in making it a better situation for both. Of course that is most likely why they don't want to give the 3K upfront bonus money to Martin as there already is a lease on the non-productive unit and perhaps they are trying to get out of paying the 3k per acre to him...so they are stalling while they make a decision. that is of course if I am understanding the situation so far correctly.</p> Keith, how long after you sig…tag:gomarcellusshale.com,2012-01-06:2274639:Comment:2208282012-01-06T18:20:10.631ZMartin J Huthhttps://gomarcellusshale.com/profile/MartinJHuth
<p>Keith, how long after you signed did you get your denial letter? I signed October 26, have not heard anything yet except for when I called the landman a month ago. Marty</p>
<p>Keith, how long after you signed did you get your denial letter? I signed October 26, have not heard anything yet except for when I called the landman a month ago. Marty</p> When a well is no longer prod…tag:gomarcellusshale.com,2012-01-06:2274639:Comment:2205812012-01-06T16:51:46.925ZJack Strawhttps://gomarcellusshale.com/profile/JosephHawk
<p>When a well is no longer producing, the state requires that it be plugged and abandoned.</p>
<p>This will potentially cost the O&G company something like $20,000-$30,000 for a shallow well.</p>
<p>Also, so long as a property is HBP, the O&G company are in possession of a valuable lease.</p>
<p>A hypothetical situation: They get $560/month (paying $80/month to Royalty owner.</p>
<p>It costs them $600/ month to maintain the well and production.</p>
<p>They are losing $40/month…</p>
<p>When a well is no longer producing, the state requires that it be plugged and abandoned.</p>
<p>This will potentially cost the O&G company something like $20,000-$30,000 for a shallow well.</p>
<p>Also, so long as a property is HBP, the O&G company are in possession of a valuable lease.</p>
<p>A hypothetical situation: They get $560/month (paying $80/month to Royalty owner.</p>
<p>It costs them $600/ month to maintain the well and production.</p>
<p>They are losing $40/month ($480/year).</p>
<p>But, they are delaying an expense of $30,000 to P&A.</p>
<p>Looking at the time value of money, by maintaining production they are essentially borrowing money at less than 2%.</p>
<p>And, more importantly, HBP from a shallow well allows them to hold the deep drilling potential - possibly worth many thousands of dollars per acre.</p>
<p>There have been documented cases when very small royalties have been paid on non-producing wells - simply to avoid the expense of P&A and to dupe the Mineral Rights owner into believing that the O&G operator still have a legal right to hold the lease.</p>
<p> </p>
<p>JS</p>
<p> </p> both you Jim and dr.j have ad…tag:gomarcellusshale.com,2012-01-06:2274639:Comment:2208172012-01-06T16:05:17.930Z0l1a6laz7smpfhttps://gomarcellusshale.com/xn/detail/u_0l1a6laz7smpf
<p>both you Jim and dr.j have added good input here..hope it helps someone.</p>
<p>my question is Jim, if the well can produce enough to give 'free gas' to the landowner...then isn't it producing to pay royalties? Actually I did read that he is getting about $80 in royalties so there is some. I mean are they leaving it on to give the owner some free gas? I find it difficult to understand that if there is enough ng for the heating of their home...isn't the oil company deriving some ng from…</p>
<p>both you Jim and dr.j have added good input here..hope it helps someone.</p>
<p>my question is Jim, if the well can produce enough to give 'free gas' to the landowner...then isn't it producing to pay royalties? Actually I did read that he is getting about $80 in royalties so there is some. I mean are they leaving it on to give the owner some free gas? I find it difficult to understand that if there is enough ng for the heating of their home...isn't the oil company deriving some ng from that well to sell? to pay the landowners their royalties also? could they be postponing to delay as the owner stated his bonus and an 18% royalty is a very decent royalty..?</p>
<p>I am new at all of this and just learning...so if my questions seem ignorant, forgive me.</p> It is generally accepted that…tag:gomarcellusshale.com,2012-01-06:2274639:Comment:2205682012-01-06T15:10:37.111ZJim Litwinowiczhttps://gomarcellusshale.com/profile/JimLitwinowicz
<p>It is generally accepted that using house gas from a well extends the lease as HBP. The gas has value that could be sold instead of being used to heat the house, thus the homeowner is getting financial reward.</p>
<p>Look for any clause that states what depth or names the strata they are drilling to. If none is mentioned then the deep rights are also HBP. If they do state a depth or strata, then you MAY be able to lease the deep rights separately.</p>
<p>It is generally accepted that using house gas from a well extends the lease as HBP. The gas has value that could be sold instead of being used to heat the house, thus the homeowner is getting financial reward.</p>
<p>Look for any clause that states what depth or names the strata they are drilling to. If none is mentioned then the deep rights are also HBP. If they do state a depth or strata, then you MAY be able to lease the deep rights separately.</p>