Replies to This Discussion

Permalink Reply by Sylvester Deal on February 9, 2013 at 1:08pm

I can understand that mineral owners that may have signed early at low bonus would see this bill as a plus, however the current state of gas prices was achieved by continued drilling to hold acreage in the face of signs that said slow down.  Development of unconventional plays requires years to do it properly, rather than the run-n-gun style imposed by drill or perish leases or proposals such as this.  If passed, I'd expect bonus levels to tank.  If passed it may only apply to NEW leases not to new units.

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Permalink Reply by Jack Straw on February 9, 2013 at 2:09pm

 

If mineral owners that may have signed early at low bonus have had a well (or wells) drilled and in production, they are likely not too bitter about the low bonus, as they smile while taking their royalties to the bank. If mineral owners that may have signed early at low bonus now find that they have much (or most) of their property tied up (perhaps for generations) in an unproductive fashion, I believe that they have a valid reason to be unhappy.

 

RE: “Development of unconventional plays requires years to do it properly”

The onus is upon the Operator to manage their business; the onus is not on the mineral owner to bail out an Operator’s poor business decisions. The landowner is not responsible for the boom/bust cycle; the landoner is a hapless victim.

As development of unconventional plays requires years to do it properly, legislation that would encourage Operators to lease and pool only that acreage that they truly intend to exploit in a timely would encourage honesty in their dealings with a mineral owner. As my Mother taught me, “Honesty is the best policy” – a bit of an alien concept when it comes to the manner in which O&G Operators have traditionally dealt with the denizens of the Marcellus.

 

I do not see that proposals, such as this legislation, would result in a “run-n-gun style” of drilling; quite the opposite, O&G Operators would be discouraged from leasing acreage that they were incapable of drilling up in a timely and profitable manner.

 

RE: “If passed, I'd expect bonus levels to tank.”

It has not been passed (and in fact was only recently proposed); yet in most areas, bonuses have already tanked. The ability to tie up large chunks of acreage (with minimal drilling) was an impetus for the “land rush”; taking away that capability might temper such future nonsense.

Continued drilling to accumulate and hold acreage in the face of signs that said slow down might not have occurred if O&G Operators had not been permitted to tie up large chunks of acreage with minimal drilling. This legislation may be “late”; but, better late than never.

 

All IMHO,

                    JS

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Permalink Reply by Brian Day on February 9, 2013 at 1:35pm

I don't think it effects units already laid out.  So much land has already been unitized that it will do little good in the Northern Tier counties.  Will it effect HBP on existing units?  If not, they are closing the door after the horse has run as usual.

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Permalink Reply by Samuel J. Orr on February 9, 2013 at 3:49pm

This bill needs to get passed and the sooner the better. Come  on Pennsylvanians, call your state rep and your state representative; or email them. Push hard. This is a big deal for landowners. Some O&G companies will not give you a Pugh clause. This would legislatively mandate it.

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Permalink Reply by lucky on February 9, 2013 at 6:15pm

I agree whole heartly

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Permalink Reply by jeff on February 11, 2013 at 5:12pm

OK, so in the event this bill doesn't get passed, lets look at a different approach to leasing; the interested O&G Co. lays out a proposed unit, THEN, lease negotiations begin on only the affected land, thus allowing for greater flexibility for future leasing, everyone knows what's happening and where, etc.

Any thoughts?

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Permalink Reply by Jack Straw on February 11, 2013 at 5:28pm

RE: "everyone knows what's happening and where, etc."

 

Everyone who frequents this site has (or should have) gotten an idea of what is happening.

But many do not find this site until after it has already happened to them.

And, the majority of people for whom things are happening (or to whom things will happen) have not found this site (and the information it contains).

Happily, the site helps many.

But, the help available here only impacts a minority of people who would benefit from such help.

My concern extends beyond the people who reach this site; I am concerned about that which is of benefit to all good citizens of the Marcellus and Utica.

 

Let's hope this, or something even better, passes.

 

All IMHO,

                    JS

 

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