Division Order Delay

We signed a lease in January, 2014.  Our property is in Braintrim Township, Wyoming County.  Still have not received any royalties.  Keep saying that they have not received Division Order.  Is this typical.  Does anyone know how long it takes to get things rolling?

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Permalink Reply by Nancy Mosley on February 26, 2015 at 4:51pm

Do you know that they have drilled a well?

Permalink Reply by Sally Bell on February 26, 2015 at 5:10pm

Yes, Nancy.  They have drilled 3 wells and one pad and are planning to drill 2 more soon.  State numbers say they have been producing.

Permalink Reply by Sherre Boyanowski on February 27, 2015 at 5:40am

Sally,

Franclaire west?  No division orders for 8H or 9H yet. Should be paid on 4H.  I will let you know as soon as I learn something on the division orders.

Permalink Reply by Sally Bell on February 27, 2015 at 11:17am

Thank you, Sherre.  Are you a land owner within the Franclaire area?

Permalink Reply by Sherre Boyanowski on February 27, 2015 at 1:28pm

Yes I am Sally. Where are you, along the river?  The pad is on my property and was named after my parents who gave me the farm - Francis and Claire. I talked to Chpk today and Steve is going to look into it with the DO department. I had a long list of questions for him, and that was one of them. All of the new wells are on line and doing great. I have been paid for all of the East wells by Chpk, but not by all the other O&G companies yet.  They have to get all the info from Chpk first. I will keep you posted. He thought he would have answers by Monday. Have you gotten checks for West 4H?

Permalink Reply by Sally Bell on February 27, 2015 at 2:16pm

Wow, Sherre, you're the perfect person to talk to!  Nice to meet you.  I love the fact that the pad is named after your parents--I thought maybe Franclaire was a last name.  Now I see.  Do you live in Wyoming County?  I live in Montana.  The property was handed down through generations to my Dad who just passed away in August.  Our 34.8 acres is about right in the middle of the 1100 acres on Franclaire West.  And, no we haven't seen any royalties.  We signed a lease with Chief OG in January, 2014.  Seems we should be seeing something by now.  No one at Chief seems to know anything--just keep repeating the same mantra.  I don't have a contact at Chesapeake.  It's all so fascinating.  Have to pinch myself some days!  Thanks for the info.  Would love to stay in touch.

Permalink Reply by Sally Bell on February 27, 2015 at 2:27pm

Hi Sherre.  Just looked up some info.  I believe your property borders ours on the north.

Permalink Reply by Sherre Boyanowski on February 28, 2015 at 1:01am

Overfield?  1-855-212-1150 Is the number at Chpk for PA landowners only.  Because of the transfer of ownership, Chpk MUST be contacted in writing. Give them a call on Monday morning. I've talked to Steve, Stevie, and Stephen. I see from my map that you weren't leased at the time the unit was declared. Not sure how they handled it. The money may be in escrow or they may have used the 400 rule (?). Now that you have a lease with Chief, it may complicate things. Just keep on them. 

     They are drilling the 3rd well on Roundwood now. One has been drilled in the West unit already. Pipeline is due to be built in July. Don't expect to see any checks till fall on the new wells there. Not sure how they are going to do the new unit. The pad is in the West unit and they are drilling both units. 6 wells in all. 

     If I can be of any help, let me know. I keep up on what is going on. Check out Chpk's third quarter report, and under Marcellus there is a nice mention of the Franclaire pad and 8H. 

Permalink Reply by Sherre Boyanowski on February 28, 2015 at 4:07am

Marcellus Shale (Northern Pennsylvania): Northern Marcellus net production averaged approximately 882 mmcfe per day (2.08 gross operated bcfe per day) during the 2014 third quarter, an increase of 1% sequentially. In October 2014, the company connected to sales the Franclaire 8H in Wyoming County, Pennsylvania, which achieved a peak rate of 30.6 mmcf of natural gas per day. The well was one of five on the Franclaire drilling pad, from which production combined in aggregate achieved a peak rate of approximately 94 mmcf per day. Average completed well costs (as measured from January through July) are approximately $7.0 million with an average completed lateral length of 6,300 feet and 32 frac stages, compared to an average of $7.9 million in 2013 with an average completed lateral length of 5,400 feet and 13 frac stages. Laterals have increased 17%, the number of frac stages has nearly tripled and proppant per lateral foot has measurably increased all while total well costs have declined 11%. The average of completed well costs is on track with the year-end 2014 TARGET of $6.9 million per well. Wells in various stages of completion or waiting on pipeline in the area increased to 125 as of September 30, 2014, compared to 112 at December 31, 2013, due to increased pad drilling. Cycle times CONTINUE to decrease and the company anticipates significant reduction to inventory over the next 12 months. The average peak production rate of the 23 wells that commenced first production in the northern Marcellus during the 2014 third quarter was approximately 13.4 mmcfe per day.

Permalink Reply by Sally Bell on February 28, 2015 at 5:56am

Okay, thank you for the info.  I will call on Monday.  What is the 400 rule?  I'm going to read your second post above very slowly and try and figure out what all that means.  Complicated.  lol.

Permalink Reply by Sherre Boyanowski on February 28, 2015 at 7:05am

Sally,    I have heard it called that, ( 400 rule) but not sure if that is the true name for it. If you don't lease, it is almost as if you become a drilling partner. Once they have drilled, they wait until they have reached X amount of dollars in sales, they take out for your share of the drilling costs and then you get paid 100% of your share of the royalties. Someone please correct me if I'm wrong or don't have all the facts.

     The second post was from Chesapeake's 3rd Qtr report. The lateral on FC West 8H is 8129 feet. the lateral on 9H is 8825 feet. They did a different type of production on those 2 wells. They left the pipe at  5 inch in the well,(instead of 2 1/2 in) put a bigger/double Christmas tree on it and have the gas coming out in 2 pipes from each well. A single one would not be able to withstand the volume coming out of the pipe at that size. At one point they opened them up and let them flow. That was when they were doing 30 mmcf per day each. They have since backed them off and they are doing 15-20 mmcf per day now. When they first started drilling in our area, 3mmcf was a good well, 5 mmcf better and 9mmcf a super well. You can see why they are ecstatic about our wells that are doing 15 - 30 mmcf per day.  

If you are ever interested in selling your property, let me know. Since it boarders ours and you are land-locked, we would be interested in it with or without the minerals. 

Permalink Reply by Tim on February 28, 2015 at 7:39am
And if you would like to sell your mineral rights, I would be interested in purchasing them.

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