lease recorded 4 months ago and nothing

i contacted guernsey county recorders to find out if my lease has  been recorded.  it was recorded on dec 12, 2011. i signed with shell(swepi) on october 28, my 120 banking days expired april 23. nothing has transpired.  what should my next steps be. thanks

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Permalink Reply by Jack Straw on April 24, 2012 at 2:20pm

I would telephone your contact at Shell and calmly explain that you had expected payment by now, and that none was forthcoming.

Ask them to please research the situation, at their earliest convenience and ask them inform you as to what the payment problem might be.

All IMHO,

                JS

Permalink Reply by Betty on April 24, 2012 at 2:44pm

Yo Jack

My property is stuck between two units (from what I was told a couple of years ago, i think a neighbor on the north border is leased with some small company holding us up.)  anyway, I seem to recall having read somewhere that the gas companies have a 300 ft leeway with borders.  is that correct?  

Permalink Reply by Billy Park Whyde on April 24, 2012 at 4:25pm

Depends on where your at and what type of well and depth . In Ohio  a horizontal 500' from property lines

Permalink Reply by Jack Straw on April 24, 2012 at 4:36pm

Different States have different rules.

What is required (by legislation) depends upon what State you are in.

What an Operator chooses to do in a particular State is a function of what they feel they can legally do. 

This is my understanding:

PA is "right of capture", the horizontal leg of a borehole could theoretically be directed right along a property boundary.

Other States have their own set of rules. Also, these "rules" are subject to change. Some of the set back rules were altered in PA effective this month (by virtue of House Bill 1950, elements of which are under appeal).

When it comes to fracing, the common assumption is that the distance that is affected by a frac extends approximately 300' horizontally from the well bore. This is a "rule of thumb" distance; the actual distance for a particular well would (for the most part) be both largely unknown and unknowable. It would not be surprising to find that a company would program the horizontal leg of a well bore to be parallel and 300' from a unit boundary.

All this is opinion and informal understanding, others could likely correct or add to what I have stated. Others might know the rules for States, other than PA.

 

JS

2wnbjkbqgwdf2Permalink Reply by 2wnbjkbqgwdf2 on April 24, 2012 at 10:36pm
Although PA is a Right of Capture State you must still remain 330 ft from property line.
Permalink Reply by Jack Straw on April 25, 2012 at 4:08am

I understand that the surface location of the start of a well need be 330 ft from property line.

But does the (subsurface) horizontal leg likewise need  be 330 ft from property line?

This is what I am not sure of.

Clarification from anyone?

JS

Permalink Reply by Billy Park Whyde on April 25, 2012 at 4:11am

Depends on where you are at Jack. 

Permalink Reply by Jack Straw on April 25, 2012 at 5:09am

Billy,

        I was referring to PA.

My understanding is that the 330' rule for well site harkens back to the day when the concern was that a Derrick could topple and effect a neighboring property - but this just might be more folklore than fact.

 

JS

Permalink Reply by Jack Straw on April 25, 2012 at 7:19am

I found this information in a previous post by Frank Walker:

"ABSENT fracking, PA law allows drilling of Marcellus horizontals right up to the property line.

However, gas companies are skittish regarding frac trespass here in PA because the matter has not been adjudicated.  They are well aware of frac trespass, believe me, much more so than the average landowner.

So what to do?  Most gas companies drilling in PA have avoided and sidestepped the issue by voluntarily setting back their horizontals from property lines.  This might not entirely avoid frac trespass, but it does minimize such trespass (possibility for frac trespass depends on the precise nature of the shale because that is an important factor in determination of frac outreach or radius).

If you study Garza, you will see the wisdom of the Texas Supreme Court as regards this issue.  The Texas Supremes decreed that frac trespass is legal in Texas.  But they were aware at the time they ruled that in Texas, unlike here in Pennsylvania, there IS a formal 330 foot setback for drilling of horizontals.  And that's the critical difference between the two states.

Frac trespass (fracking of unleased shale) is the issue it is because of two conflicting imperatives:

1.  Any Lessee should be entitled to frac all of its leased shale.

2.  No landowner should be subjected to having his shale fracked except by his Lessee.

Our PA Rule of Capture further muddies the water on this issue.  Absent fracking, there is no uncertainty regarding legality of free gas capture via off premises drilling;  it's legal.  The rub, the dilemma, comes when driller seeks to steal gas by first stimulating (fracking) unleased land in order to free that gas."

 

Link to that post: http://gomarcellusshale.com/forum/topics/property-units?id=2274639%...

 

JS

Permalink Reply by Betty on April 25, 2012 at 12:06pm

So in other words, PA has no set-back requirement in place at this time. 

I found where I read what I refer to as the encroachment clause on this site in tioga county

http://gomarcellusshale.com/group/tiogacounty/forum/topics/shell-ap...

Another question was from a woman wanting to know if Shell participates in the state law known as "right of capture" meaning if a landowner has not leased but is in a unit, the company literally can "suck the gas out from under" the unleased property.

Operations Manager Rick Mykitta said that the company has to stay within the unit, but can go 200 to 300 feet past where the line is..."

----------------

question -- the above refers to unleased property -- I'm leased -- does this still apply?

------------------

also found this info  (I especially liked reading the last sentence  - Ha!) 

Q.  Can a gas company that has leased neighboring landowners' gas and oil rights just take my gas right out from under my property if I do not lease with that gas company?

This is essentially a "Rule of Capture" question.  A gas company drilling on an adjoining leased property can drill right up to the boundary of your unleased property and any gas that naturally migrates off of the unleased property and is then "captured" on the leased property is the company's property. However, the company cannot actually drill onto the unleased property in order to extract the gas.  At present, Pennsylvania does not have a minimum drilling set-back requirement as do some states (e.g., Texas).  As far as whether a gas company can run a hydraulic fracture (a.k.a., "hydrofrack" or, more simply, "frack") from the leased property onto the unleased property in the "normal" course of fracking a bore hole, Pennsylvania, once again, at present, does not have any definitive statutory or case law on the subject.  In any case, even in the event that a gas company does frack right on the edge of your property line, it is unlikely that gas will be drawn from more than, at most, a few hundred feet away given the tightness of the Marcellus shale formation. Moreover, based upon the way drilling patterns are laid out it would be highly unusual that a company would be able drill a bore hole right along your property line.  So, the long and short of it is, do not be intimidated by such threats from landmen or gas companies.

http://www.leasemarcellus.com/index.php?option=com_content&view...

On the other hand, I also read an article today (apparently, I do a lot of reading!) about an upcoming credit crunch that will probably eliminate a lot of the mid-size or smaller natural gas companies, in which case my neighbors lease eventually may no longer be an issue.   For some reason this sounds to me like a good news/ bad news situation.   it's rather lengthy, but here is the link

http://www.reuters.com/article/2012/04/25/us-natgas-lending-idUSBRE...

Thanks again for the reply

Permalink Reply by Jack Straw on April 25, 2012 at 2:05pm

RE: "Another question was from a woman wanting to know if Shell participates in the state law known as "right of capture" meaning if a landowner has not leased but is in a unit, the company literally can "suck the gas out from under" the unleased property.

Operations Manager Rick Mykitta said that the company has to stay within the unit, but can go 200 to 300 feet past where the line is..."

----------------

question -- the above refers to unleased property -- I'm leased -- does this still apply?"

My read of the response from the Shell Rep is that the physical well bore must remain within the unit, but the fracing of the well can result in gas migrating into the well bore from outside the unit. This is consistent with PA's "Right of Capture". The simple answer to your question is "yes".

In reality, in very most occasions, the O & G Operator will likely exercise restraint and stay around 330' from a unit boundary - the law in PA is very generous (to the O & G Companies), no sense screwing things up by "waving a red flag in front of a Bull".

 

RE: "On the other hand, I also read an article today (apparently, I do a lot of reading!) about an upcoming credit crunch that will probably eliminate a lot of the mid-size or smaller natural gas companies, in which case my neighbors lease eventually may no longer be an issue."

Since Col. Edwin L. Drakes little foray near Titusville, PA - the O & G Industry has oscillated from Boom to Bust.

When a company goes Bankrupt, someone will come in and buy up the assets (leases). They may get it for pennies on the dollar; but, there will always be someone who will invest in order to pick up the pieces.

 

All IMHO,

                  JS

Permalink Reply by Betty on April 25, 2012 at 2:50pm

Thanks for the response.  However, just to confirm, PA does not have a set-back requirement in place.   I can find no existing PA regulations in place, except for the following:

 http://downloads.cas.psu.edu/naturalgas/pdf/DickinsonPALaws.pdf

 

RULE OF CAPTURE

The rule of capture states that there is no liability for drainage of oil and gas from under the lands of

another so long as there has been no trespass and the individual observes all relevant statutes and regulations. In

Pennsylvania, the rule of capture follows that a neighbor has no right of recourse against a neighboring oil and gas

produced solely because someone else has drained and produced the oil and gas. Seneca v. Howard, 867 A.2d.

656 (Superior Court of Pennsylvania, Western District, 2004

http://downloads.cas.psu

the way I read it  "the individual observes all relevant statutes and regulations. "  is simply some legalese put in should PA actually institute such type of law... leaving it to the individual landowner (or the gas company-- yet this would be in their favor -- so why bother) to deal with the issue -- or perhaps I'm missing something.

thanks again. 

I should add the way I read this it applies to leased (unless by the same company, I hope) or unleased properties

 

 

 

 

 

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