Dominion Storage Fields in WVA

Recently we were approached by a landman working for Hawkeye Research looking to assemble a 640 acre unit in Gilmer County WVA. We have a large parcel there (300+ acres) but back in 1952 our mother signed a lease with Hope Energy that was later sold as a storage lease and eventually ended up with CNX/Dominion Transmission. The original lease is clear in limiting the depth of the lease to the "shallow" Berea Sandstone, but this fellow says that we really have no choice but to sign as no other company can drill through their lease, although someone could drill under it from another parcel. He says that Dominion has tied up 70,000 acres like this in the region. All they are offering is a new lease at the minimum 12.5%, no bonus, but that we can expect substantial royalties when the well come in. Any similar experience? Any advice?

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0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on August 11, 2014 at 1:43pm

Andrew,

      Now you know how I feel about landmen showing up at your door with all those tall tales.

Like a professional politician, they only lie when their lips are moving.

Take any paperwork a landman has to give you and before you put it in the round file, take it to a lawyer to give them a real laugh for the day.

I just looked at Hawkeyes website, they have an eye for your potential wealth.

They are middle men out getting leases signed to sell to a driller. Stay clear for sure.

Any Hawkeye employees want to tell us where you've drilled wells in WV?

Permalink Reply by Andrew Blackley on August 11, 2014 at 2:03pm

We actually met with him in their Harrisville office, so we knew who and what they are. They say they are working on assembling working units for a Dominion/CNX joint venture that intends to start drilling "as soon as possible". We are going to consult with the Bricker and Eckler group later this week.

Back in 1984 CNX allowed a "farmoutee" to drill a fractured well beyond the Berea Sandstone and into the Rhinestreet formation on this land and it is still producing gas, but it has really tapered off in the last five years. My question to the lawyers is does this open the lease to drilling by others.

Permalink Reply by Old Oil Scout on August 11, 2014 at 2:39pm
Brickler can definitely sort this out for you. While limited to the Berea sandstone, those Hope folks were likely smart enough to retain some of the deeper rights under your property. Should that turn out not to be the case, you would have the right to lease the deeper rights to whom ever you choose. If the shallow rights are actually be used for storage, Hope successors very well might have some input on drilling thru their storage reservoir to protect its integrity.
Permalink Reply by Nancy Mosley on August 11, 2014 at 2:42pm

Hope successors today are CNX I think. CNX/Consol.

Permalink Reply by Andrew Blackley on August 11, 2014 at 2:48pm

Nancy: You are correct. Hope had the original lease in 1952 and then sold it. We have a lot of correspondence from my father-in-law prodding CNX to do something besides store gas there and he finally succeeded in bugging them enough to have the well drilled in 1984.

Permalink Reply by Kim on August 15, 2014 at 8:22am
http://triblive.com/mobile/5230572-96/consol-gas-dominion

Dominion seems to have already sold the deep rights without these ratifications.
Permalink Reply by Timothy M. Greene on August 11, 2014 at 2:25pm
Come to meeting in Weston tomorrow evening (August 12) for more information to help your situation with your acreage. This meeting is sponsored by Land & Mineral Management of Appalachia. We work FOR mineral and surface owners. The meeting is from 6 to 8 pm at the Lewis County EMS Building. Call Tim Greene at 304.545.7644 or email at tim@LMMA.com with questions
Permalink Reply by Andrew Blackley on August 11, 2014 at 2:35pm

Tim:

Thanks for the invite. We just spent several days last week at the Stonewall Resort, but we are now back up here in Northeast Ohio. We were astounded to see the work going on down there! Sleepy old  US 50 was never so busy!

Permalink Reply by Kim on August 15, 2014 at 8:17am
Andrew our family was approached by Hawkeye also, we own in the DTI storage.
Permalink Reply by James Foster on August 15, 2014 at 8:56am
Dominion storage field in Columbiana County Ohio. Some people were able to sign new lease for deep rights. Some were not. Check posts on Ohio Columbiana County group.
Permalink Reply by Inchworm antenna on August 15, 2014 at 7:40pm

If it's an Old lease then good chance the driller needs to amend in order to gain permission for adequate pooling and unitization permission.  Certainly that is worth something.  Bonus, boost in royalty, better lend protections.  See an attorney to narrow down your negotiating options.

Permalink Reply by Kim on August 16, 2014 at 2:10am
That's exactly where we are...Atty retained :) awaiting negotiations! Meanwhile researching and watching every bit of news! Found interesting read regarding "Multiple Stack Pay Potential" in the Dominion Transmission storage field.

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