Well we finished up with the maneuvers of BP in Trumbull and after we on GMS studied our sources and leaked information. Our information turned out to be correct as the local business magazines produced verification of what we on GMS already digested; even though the BP strategy is still uncertain.
Now we have information coming in from Columbiana. We know that since Easter, an industry brokerage has opened up Columbiana to leasing as a clean up phase. Most of the gathering pipelines have hooked up wells and Columbiana's cryogenics plant is humming along. The trunkline connecting two cryogenics plants are on schedule so Columbiana is now ready for production supplying the new infrastructure. As can be seen by Hilcorp in the north aggressively drilling since there cryo is going online and the pipelines are snaking forward, Columbiana has been at a standstill.......or has it?
Today, my sources tell me after being in Texas for a week, that Independent drillers are coming into Columbiana to begin widespread drilling. That's right folks, CHK, seemed to run out of gas in Columbiana and we heard CHK was in discussions. I guess the outcome is that we are going to see units thrown together and those new pipelines hooking more wells up. This is Great news!
Columbiana is soon to be drilling like the EF and Bakken, the infrastructure is just about set.
There are tracks that run alongside Southern Blvd and head down towards the transfer yard in Fairfield Twp by SR344 & SR11. If you have product that can't get out by pipeline you could get it out by rail. You can also bring supplies in by rail.
Be aware of strawmen. These people top lease the CHK lease and ask for 6 months for due diligence. When in fact these folks are actually working for other companies and are only interested in keeping landowners tied up for an additional 6 months, this costs them nothing.
It might be better to wait until drilling activity actually begins in your area. Although upfront money is enticing it's the royalties that will pay future bills.
As an after thought, I doubt there are many independent drillers planning to move into Columbiana County in the near future. Most of the County was leased by CHK and most of those leases do not begin to expire for at least a year (2015 and beyond).
That would mean any company planning to work in Columbiana County would have to deal with CHK, that cooperation won't come cheap.
Instead, what I forsee as a possible scenario is an agressive top lease program. Which would mean any significant drilling will not occur for at least 2 - 3 years.
Just a thought.
CHK leased so many people in the New Middletown area back in 2008. With the 3 year renewal, this brings many leases up in early 2016. Bass Energy did the leasing before any of us knew the value and thus there were no sign on bonuses. They sold them to CHK. Also, during the sale they offered $1.00, yes a buck, to amend the consolidation clause. The clause is only 240 acres to access horizontal drilling. Now we all know these clauses are around 1200 acres. Ironically, most landowners not knowing the value, signed a simple form for Bass, who then increased the lease values, and sold 20 of them to CHK. All viewable on the master Land Access website.
We held out and never signed the amendment. Land groups thought they would come back with more cash if they need to drill and offer to amend the leases for cash. They cannot use our current lease under current drilling parameters. So they never came back, and continue to renew each year for $15 per acre.(CHK) The value of all these leases will not be known until early '16 when up for renewal OR if we hear from CHK they need to renegotiate the consolidation for those of us that did not sign the amendment. It has been quiet for all the years of the lease. Time will tell. If they allow the leases to expire quietly, we figure the area will not be drilled.
Meantime surrounding smaller parcels signed with Hilcorp for $5K per acre, some in my family. And Hilcorp is joint owner of the cracker plant in New Middletown.
I agree with posters to avoid top leases and simply sit and wait this out.
Are all of the people along their pipeline unleased? Because if so then these guys aren't real smart.
I know a lot of people down here in Lisbon ( including myself) are leased with dps penn/ Chesapeake. I would imagine a lot of there leases will be sold to Hilcorp in the near future