Is it time for a HBP landgroup ?

  With the huge number of acres in the Marcellous & Utica held by production & the old leases that go with them , the general concensus seems to be "you're out of luck", yet many of those old leases have unitization limits too small to suit the horizontal drillers. Why are these acres just out of luck ? Usually landowners are told, well they had to buy the lease from the current operator or JV with them, so no bonus or higher royalty for you. Let us rewrite your old 1/8th lease to suit us or we'll go around you. But if enough HBP acres combined & said no, we want a little something too, then would we not have at least some bargaining position ? Just a thought, opinions please.

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Permalink Reply by Billy Park Whyde on January 22, 2012 at 7:48am

 I would think records are available. If the oil was trucked off your property the oils gathering company would have recorded it. The purchaser of that oil would have had (division orders on the payment for that oil at least in Ohio) I bet those records could be found. A few letters to some companies might do you some good. In my area Muskingum County Ohio, the purchasers were Quaker State, and Valvoline. 

  If you were to ask around your area some old timers they might have a good idea of who was writing the checks. Try sending them a request for info.

   Possible?

   Dear XXXX

     I have a well upon my property located at XXXXXXXXX the Wells number recorded with the (State Regulatory Agency) is XXXXXX I request a copy a PDF file if possible or paper copies of the Division orders for that well between  XXX and XXXX or payment records for the purchase of that production from that well.

  By all means advise me if you could provide me with that information.

   It might go now where but if they recorded it which they did with the info you gave to them they should be able to find it without to much of a hassle.

  I am no attorney but at the very worst it only took a few minutes of your time and a postage stamp.

Permalink Reply by Joe Miller on January 22, 2012 at 9:23am

I did contact an attorney back in August 2011 and he said only 40 acres were aloted to the well in the Ohio Division of Geological Survey so he could get the other 60 acres released by saying that they breached the lease by not fully developing all of the property.Then we could file a law suit on the other 40 acres.But when I call him he won't return my phone calls.I talked to him in December and he still had'nt done the title search.So it's a little frustrating, my neighbor's Signed the same lease in 1968 at about the same time,well drilled at the same time,and through the years switched owners at the same time.There Attorney got their case taken to court and "The Oil and Gas Lease Voided". My attorney said I could talk to there attorney to see if he could do the same for me but he said that they are to busy at this time.Billy I think we used to work together before I got my lay-off.

Permalink Reply by WLW on January 23, 2012 at 2:04am

Joe

Mark & Billy have good advice below.

You can try this also

Contact the ODNR as they have records for every year showing how much O & G it produced. Read you lease over good, several times. Get the records and find out how much produce there was. On some leases the well has to be shut in for a whole year to file a forfeiture and some are a short as 90 days without production as mine was. Mine set for years with no production and the records at the ODNR showed this for us. The producer tried to testify that the states records were wrong but the companies are the ones that supply that info. They shot theirselves in the foot on that one.

Permalink Reply by Robert Bond on January 29, 2012 at 6:57am

Seem like some good information has been diseminated here.  Lets keep it comming.  I think there are a lot of leases out there that have not been complied with.  Thanks!!!

Permalink Reply by Robert Bond on December 12, 2012 at 3:53pm

So what is new about modifying these old HBP leases, been awhile and what has been going on about this?

Permalink Reply by caualie on December 13, 2012 at 5:58am

   Not much new going on that I'm aware of. Right now I think everybody needs to get their original lease & all related assignments of it in hand & do some homework & try to find out if your deep rights have been sold.  As far as the state production records go. I personally know 1 individual who received no royalties for a period of years. The state shows no production for several years. As soon as he tried to get" released", the lease " transferred" to another company who sent a small check for back royalties. The new owner turned out to be a "dummy" company operating out of a vacant building set up by the previous company. Even though no production was reported to the state, the old 60's lease required the landowner to point this out to the operator & give them a specified amount of time to correct the problem, which they claim they now have done, even though no production records now exist with the state to verify that, due to an " error" as they put it. Every day people find out just how bad some of these leases are.  I have heard some chatter that the industry is going to try to circumvent these unitization issues through legislation since Ohio now has a super Republican majority in both branches of the legislature, but I have no factual knowledge of that.

Permalink Reply by caualie on December 13, 2012 at 4:38pm

 Fang:

  Yes this was in Ohio. Initially the landowner held the check & consulted his attorney who pointed out the clause requiring the landowner to notify the operator & give them x amount of days to make payment. Also there were storage provisions in the old lease. I do not know if the check was cashed at that point or not. I really don't understand the reasons of setting up a new company in a vacant building unless it has something to do with avoiding legal action for failure to report the production for the missing years. 4 years if I remember correctly. The landowners attorney didn't seem to think it was unheard of for a well operator to not report any production to the state & indicated the state usually just turns a blind eye to the situation. I personally looked up the well number & there was indeed no production reported on that particular well for a period of years. Go figure.

Permalink Reply by Jim Litwinowicz on December 13, 2012 at 4:44pm

I have a friend in Pa that got out of an old lease because they had no production for three years. Case law in Pa supported that position. I have no idea what Oh law is but look into it.

Permalink Reply by Jim Litwinowicz on December 13, 2012 at 5:12pm

In my friend's case, I sent them an article about the case that voided the lease for non-production. Their attorney convinced the company they would lose in court so they folded.  ( I don't know for sure if article helped.....attorney may have already known the case law.)

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