Lease Assignment - GoMarcellusShale.com2024-03-29T09:21:36Zhttps://gomarcellusshale.com/forum/topics/lease-assignment?commentId=2274639%3AComment%3A876547&xg_source=activity&feed=yes&xn_auth=noSo true!tag:gomarcellusshale.com,2021-02-24:2274639:Comment:8797272021-02-24T15:48:55.886ZNancy Mosleyhttps://gomarcellusshale.com/profile/NancyMosley
<p>So true!</p>
<p>So true!</p> This gas industry business i…tag:gomarcellusshale.com,2021-02-24:2274639:Comment:8796482021-02-24T15:46:34.523Zfarmgashttps://gomarcellusshale.com/profile/farmgas
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<p>This gas industry business is indeed very complicated...</p>
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<p>This gas industry business is indeed very complicated...</p> Yes, thanks Nancy. tag:gomarcellusshale.com,2021-02-24:2274639:Comment:8796472021-02-24T15:37:58.014ZJoe C.https://gomarcellusshale.com/profile/NickC6648
<p>Yes, thanks Nancy. </p>
<p>Yes, thanks Nancy. </p> You would have to read the as…tag:gomarcellusshale.com,2021-02-24:2274639:Comment:8795582021-02-24T15:31:57.072ZNancy Mosleyhttps://gomarcellusshale.com/profile/NancyMosley
<p>You would have to read the assignment documents to see what was assigned/conveyed/sold and what was retained/excluded. I have seen the "whole" lease assigned with the deeper rights retained, and just the shallow wells sold, and sometimes the shallow wells with maybe 5 acres around the well sold, etc. Sometimes these documents refer to some "Agreement" that is not recorded so you might not see exactly what the terms are. But the bottom line is, that whoever holds the original lease, that…</p>
<p>You would have to read the assignment documents to see what was assigned/conveyed/sold and what was retained/excluded. I have seen the "whole" lease assigned with the deeper rights retained, and just the shallow wells sold, and sometimes the shallow wells with maybe 5 acres around the well sold, etc. Sometimes these documents refer to some "Agreement" that is not recorded so you might not see exactly what the terms are. But the bottom line is, that whoever holds the original lease, that lease is in effect as long as the terms of that lease are met (like continuous production, regular payment maybe monthly or quarterly, or a "flat rate royalty" paid regularly, or something. If any one well involving that acreage (including if that lease acreage is in a unit) is still producing / paying royalty, then the lease is valid. As I said before, I am not a lawyer but I have read a lot of leases and assignments, and have attempted to sort out my own sometimes very complicated "who owns what" situations. And, once the Original Lessor signs the lease, unless there is a provision for him/her to be notified or to approve any assignments, he/she is at the mercy of the lessee/assignee for any information.</p> What we have to look at is th…tag:gomarcellusshale.com,2021-02-24:2274639:Comment:8795572021-02-24T15:22:51.537ZJoe C.https://gomarcellusshale.com/profile/NickC6648
<p>What we have to look at is the HBP. Anytime someone signs a lease with giving that company ALL Depths, it is held by the old lease. If CNX sells DGO all assets (Shallow Well), DGO has the ALL depths from the lease that was signed in 2004. If EQT, SWN or even CNX wanted to come in to build a 640 acre marcellus/utica unit, they have to have a assignment with DGO (New Owner of Depths). The assignment is giving EQT, SWN or CNX the right to development deeper shale. DGO still owns the Shallow…</p>
<p>What we have to look at is the HBP. Anytime someone signs a lease with giving that company ALL Depths, it is held by the old lease. If CNX sells DGO all assets (Shallow Well), DGO has the ALL depths from the lease that was signed in 2004. If EQT, SWN or even CNX wanted to come in to build a 640 acre marcellus/utica unit, they have to have a assignment with DGO (New Owner of Depths). The assignment is giving EQT, SWN or CNX the right to development deeper shale. DGO still owns the Shallow well and Production. For the mineral owner who has that old lease, EQT, SWN or CNX would have to send them a Amendment of ratification to that old lease to modify newer language of a Pooling/Unit and Shut-in terms. This allows the mineral owner to collect the original royalty percentage from the older lease on any deep depth production. Of course, you want to take the amendment to an attorney and have the attorney fight to get the royalty higher since EQT, SWN or CNX is modifying the lease. </p>
<p>Now, say if DGO wants to produce the deep, they would have to go through the same process, amendment of ratification of the original lease. </p>
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<p>The amendment is to modify newer language used in newer leases. A company can not sign a new lease since it is HBP. WV law. If the shallow well is plugged or abandoned, then the company can present a new lease.</p>
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<p>For example, I have a cousin in Marion Co WV who had a shallow well from Waco oil and gas. They drilled it in 2003. It's still producing (HPB). He gets a phone call from XTO Energy about needing a amendment of ratification of the older Waco lease because they're drilling a 640acre unit. My cousin went to the courthouse and pulled the assignment where WACO assigned XTO the deep rights to drill. So XTO had to modify that older lease with newer language. </p>
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<p>When a company like WACO assigns to XTO, XTO has a separate farm out agreement on what they are paying WACO or WACO may get a certain royalty percentage from XTO royalty on all producing well legs. </p>
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<p>I hope this helps.</p>
<p>JC</p> JC, I still find this proces…tag:gomarcellusshale.com,2021-02-24:2274639:Comment:8794562021-02-24T13:49:38.151Zfarmgashttps://gomarcellusshale.com/profile/farmgas
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<p>JC, I still find this process to be confusing to me. CNX sells their shallow wells to Diversified Gas & Oil and those wells still HBP the rights to deep shale gas even though no new deep wells have been drilled yet. DGO bought the leasing rights down to the target formation as Nancy Mosley stated. Does this mean that CNX could no longer drill within that target zone but only to deeper depths? In other words, in my understanding of all of this, DGO only owns the wells &…</p>
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<p>JC, I still find this process to be confusing to me. CNX sells their shallow wells to Diversified Gas & Oil and those wells still HBP the rights to deep shale gas even though no new deep wells have been drilled yet. DGO bought the leasing rights down to the target formation as Nancy Mosley stated. Does this mean that CNX could no longer drill within that target zone but only to deeper depths? In other words, in my understanding of all of this, DGO only owns the wells & infrastructure but CNX still owns the primary lease, even though I did not sign a new lease with DGO, right? This sounds like a sweet deal for CNX (maybe EQT, too) doesn`t it? I suppose my confusion is this, why should the deep gas rights not be severed since the original lease holder no longer owns the shallow gas wells and HBP rights! Why was the original lessor not a part of this process?</p>
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<p></p> Angela, The shallow lease hol…tag:gomarcellusshale.com,2021-02-24:2274639:Comment:8793852021-02-24T12:50:58.004ZJoe C.https://gomarcellusshale.com/profile/NickC6648
<p>Angela, The shallow lease holds all depths (HBP) (Held by P<span>roduction) </span>unless you modified that back in 2004. When a E&P company like EQT o<span>r </span>CNX wants to d<span>r</span>ill a Ma<span>rcellus/Utica unit, they do an assignment with the company who holds the original lease. Then the E&P company like EQT or CNX will send you an amendment of ratification for you to sign for you to get paid on any deep production.</span></p>
<p>Angela, The shallow lease holds all depths (HBP) (Held by P<span>roduction) </span>unless you modified that back in 2004. When a E&P company like EQT o<span>r </span>CNX wants to d<span>r</span>ill a Ma<span>rcellus/Utica unit, they do an assignment with the company who holds the original lease. Then the E&P company like EQT or CNX will send you an amendment of ratification for you to sign for you to get paid on any deep production.</span></p> Check out a recent GMS posti…tag:gomarcellusshale.com,2021-02-21:2274639:Comment:8765912021-02-21T01:31:44.403Zfarmgashttps://gomarcellusshale.com/profile/farmgas
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<p>Check out a recent GMS posting for gas company reports. Recent CNX reports appear to be focused on informing investors now providing less information to landowners. </p>
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<p>Check out a recent GMS posting for gas company reports. Recent CNX reports appear to be focused on informing investors now providing less information to landowners. </p> I have not read those quarter…tag:gomarcellusshale.com,2021-02-21:2274639:Comment:8764932021-02-21T01:01:48.109ZNancy Mosleyhttps://gomarcellusshale.com/profile/NancyMosley
<p>I have not read those quarterly reports. Please share your insights!</p>
<p>I have not read those quarterly reports. Please share your insights!</p> As the gas industry has chan…tag:gomarcellusshale.com,2021-02-20:2274639:Comment:8765742021-02-20T23:57:13.956Zfarmgashttps://gomarcellusshale.com/profile/farmgas
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<p>As the gas industry has changed over the past year, how do you see CNX these days? They seem to be a changed company with a new focus for the future. Their quarterly reports appear to take on a new objective now.</p>
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<p>As the gas industry has changed over the past year, how do you see CNX these days? They seem to be a changed company with a new focus for the future. Their quarterly reports appear to take on a new objective now.</p>