How long from signing a lease are you placed in a unit on average?

I signed a lease in SW PA at the end of January 2012 and was wondering how long, on average, it takes before property is placed in a unit?  I know it can take months but just wondering.  

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Permalink Reply by CAM on August 12, 2012 at 3:21am

I signed late October, 2011 and rec'd unit notice March 1, 2012.  I was last to sign and had high pressure to do so from landman, etc.  Some of the landowners in the unit had signed in 2006, 2008, 2010, and 2011.  I'm in Ohio.

Permalink Reply by Gary L. Ford on August 12, 2012 at 3:46am

Thanks that helps.  Not sure where I am in the unit but I am also a "hold-out!"

Permalink Reply by Henry Edwards on August 12, 2012 at 4:46am

Years sometimes. Maybe never.

3uq96odaochmjPermalink Reply by 3uq96odaochmj on August 12, 2012 at 11:06am

I would put the ratio at 1:100, or more.  Most likely, your tract(s) will not be put into any sort of drilling unit due to surface topography, subsurface faults/fracture intensity not warranting development, proximity to pipelines, or local zoning ordinances.  Just because you're leased doesn't mean you'll be drilled or included into a unit.  The land rush occurred just to cince up acreage.  After that, the geologic/engineering decision occurs as to where to drill.

Permalink Reply by Billy Park Whyde on August 13, 2012 at 2:35am

I tend to agree with your reply that the geology plays the biggest part, for the zoning unless your near a city in Ohio a zoning problem would be somewhat rare. The drillers are not going to make cork screws in a horizontal to get around hold outs. They will negotiate if they want it bad enough. I Ohio in many places the land is HBP where producers will be negotiating not a landowner and they will without doubt have a better idea as to what value their tract is worth unlike the landowner.

3uq96odaochmjPermalink Reply by 3uq96odaochmj on August 13, 2012 at 12:39am

yep...............exactly!!!  I always tell landowners - "take the money and run, cuz you'll probably never see a well drilled"!!!

Permalink Reply by Larry Pearce on August 13, 2012 at 3:11am

Well I agree about take the money and run, but not "probably never see a well drilled"  I am a landman in Wash Cty PA and we are ONLY taking unit leases that WILL be drilled and are on the operators drilling schedule.   Lessors are getting into their UNIT very quickly, and while I agree about the geology being the usage factor over surface topology, ANYTHING in our leasing area is HOT and has no bearing here on lease or not lease.   So it also depends on how far along the play is established.

If a unit gets outlined and you are within the proposed boundary, we will offer a lease on it. 

3uq96odaochmjPermalink Reply by 3uq96odaochmj on August 13, 2012 at 3:30am

who's "we" - do you work for? Chevron, Range, Chesapeake, or Rice? - cause they are the only ones drilling in Wash. Co.

Permalink Reply by Annien on August 19, 2012 at 2:09am

Question for you Larry-How long does it take after a permit on a well is issued to know if you are in that unit? Engineers have already put the stakes in for the well pad so do they know who is in a unit and the size? and where could I find the info. 

Permalink Reply by Jim Litwinowicz on August 13, 2012 at 3:13am

Jasper;  So you are saying that only 1 acre in a hundred will ever be unitized and drilled? I have serious doubts that the ratio is any where near that low. These shales here are very widespread and consistent compared to the pockets found in shallow drilling. Almost all land within the Utica and Marcellus boundaries will be drilled...just some may wait 20 years or more.

Gary Ford;  Be patient....be very patient.  I don't have any idea of where you are or the level of activity in your area but I do know the companies have leased a lot of land that cannot be drilled and produced in a year or two. I have been told by people in the industry that 80% of the people in my area will not be drilled in the first five year term of our lease.

But if your area is hot and they need your parcel for a planned unit, you may be placed in a unit by the end of the year. Really hard to predict.

3uq96odaochmjPermalink Reply by 3uq96odaochmj on August 13, 2012 at 3:27am

it's a "wait and see" scenario, along with the fact that not every lease will be drilled nor included in a drilling unit - that's just wishful thinking.

Permalink Reply by Jim Litwinowicz on August 13, 2012 at 3:56am

Thats a huge jump from "one in a hundred" to "not every lease." Like I said most all will be drilled and produced....eventually.  Maybe 20 years or more. A lot of factors will come into play to determine which get drilled first and when the least attractive will.

I would think most people will be in a unit and getting royalties in ten to fifteen years in the Utica and Marcellus plays. It may be just one or two wells in a 1280 acre unit so the royalties will not be huge but may still be substantial. More wells will be drilled later as demand and pricing dictates.

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