forced pooling in ohio

This is for all you'ns that are holding out for mo money, or just plain old dont want to lease your mineral rights. making it almost impossible for all your neighbors to ever get into a drilling unit and cash in on their minerals.  Not only can they force you in,but they can just go around you. Some of the maps of drilling units are not rectangles,but wierd shapes,just for that reason. Some drilling units are spaced apart a ways,with you people, left out! 

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Permalink Reply by paleface on March 17, 2013 at 4:09am

 I would think if you were in one of those high producing units as in Bradford or Washington county in PA or one of those multi-fuel units in Ohio,the well would be payed off in maybe two years. 

Permalink Reply by wyalusing jim on March 17, 2013 at 4:46am

paleface. would it surprise you to know that "one of those high producing units as in Bradford or Washington county in PA," actually pay off in a matter of months?

and as prices rise, the payoff time naturally decreases. it could be as soon as the first or second month, depending.

like i said, run the numbers for some of these wells. it only takes a calculator and readily available data. forget those "royalty calculators", they can be fun to play with, but of little value in the real world.

wj

Permalink Reply by paleface on March 17, 2013 at 5:42am

 to try and get an idea of the numbers once the well  costs are payed maybe you could help with this example if you had 100 acre's in a 600 acre unit and the unit was producing 15 million a day you would recieve about 16.7% of the gross output of the well at say $3.75 a unit what would that work out to ?

Permalink Reply by Kathleen on March 17, 2013 at 6:25am
Paleface,
I hope someone answers your post since I keep coming up with ridiculously high numbers on the royalty calculator. The smallest I could get was something like 50 million a year. My first 2 attempts had the working interest owner getting billions :0)
Permalink Reply by Tom R on March 17, 2013 at 6:52am

A fast calculation using paleface's numbers gives a gross annual income for the unit of $20,531,250. So 16.7% of that would be roughly $3.43 million. I don't have any idea of the ins and outs of working interest calculations, but would guess the 7/8 means it would be down to $3 million. Again guessing, but would assume from that would be taken a proportionate share of operating expenses, taxes, etc. Still a pretty staggering sum!

Permalink Reply by wyalusing jim on March 17, 2013 at 7:16am

yup, there are costs involved too. working interest owners dont get a free ride, but you folks are absolutely correct in the use of the term, "staggering sum".

now, for palefaces original premise about a "good well in bradford county...."

not in bradford, but in the next county over, there are wells producing as much as 5 bcf in a little over 200 days.

do the math on that one.

and then...recalculate at $5, or $6 gas. and then....multiply times 6 or 8 or even more wells in a unit.

after you rub your eyes and redo the figures a dozen times, you will begin to appreciate the nature of a shale play and the value of your mineral resources.  small wonder the industry goes to the lengths it does to lease, and even smaller wonder why they never renegotiate a royalty % once they have you at 1/8 or 15%.

how many folks still want a higher bonus vs. a higher royalty % now?

wj

Permalink Reply by Kathleen on March 17, 2013 at 8:03am
Than add the 12.5 royalty
Permalink Reply by paleface on March 17, 2013 at 9:46am

 If you plug the same numbers in the royalty calculator its close to 47 thousand a month? Maybe the people that hold out are smarter than us.

Permalink Reply by Joseph-Ohio on July 7, 2013 at 10:31am
The post seems to have been hi-jacked.
 
Back to the point:
 
Mis-applying rules developed for vertical wells to long horizontal bore Utica era wells to enable inclusion of lands without negotiation / re-negotiation is unfair to landowners and should be dis-allowed.
Landowners in Pennsylvania are experiencing similar goings-on and taking steps to contact their Governor to solicit his veto of a Bill presented him for signing into law.
 
Hope it doesn't get that far here in Ohio.
 
All IMHO.

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