Leasing with small or large oil company?

I was wondering if it is better to lease with a large or a small oil company. I think a smaller company like Eclipse would need to develop their lease holds earlier and so you would get a producing well faster. However you may need to take a smaller lease bonus up front. A larger company like chesapeake might hold a lease for decades with no well drilled because they have so much land tied up. What do you think?

Views: 841

▶ Reply to This

Replies to This Discussion

Permalink Reply by Mike Knapp on March 14, 2012 at 3:43am

There is certainly a  strong case to be made leasing with a well funded company with a strong track record of drilling.  Being a big fish in  a small pond has its advantages. 

Permalink Reply by mike4t on March 14, 2012 at 12:07pm

I think that having a bigger company drill would have definite advantages- a bigger company would have access to bigger/better rigs, better frac technology and better access to transmission lines. I think all these combined would result in a better producing well

 

Better producing = more money!

Permalink Reply by JK on March 14, 2012 at 4:31am

I agree.

We have been leased with chk for years and there is zero incentive for them to drill for the Marcellus.

They will take their own sweet time unless we... and we will..oh yes we will.

They have drilled 3 miles from us and all around us.

I have spoken to okl chk exc who says any thing to try to pacify and to shut me up.

I figure we are at least 5 years out, unless..

So, if these smaller drillers are sound then go with them but make sure all the clauses are included in your contracts.

Permalink Reply by Kathleen on March 14, 2012 at 7:06am

From what I was told one thing you should think about is, is your property big enough for them to drill without other acreage from neighbors.  If not and you are the only one to sign on with the smaller company you may never get a well.  If a bigger driller comes in and wants to drill but your lease holder wants a huge amount for the lease they may just go around you.  You can make yourself drill land locked.  If your neighbors sign on with the same smaller co. you could get a well faster since some of the smaller ones lease to drill since they have to recoup their funds.

Permalink Reply by JK on April 14, 2012 at 11:09am

Kathleen,

We have 1264 acres in Mon county, WV., which is enough for 2 drilling units.

The problem is we are leased and being held.  These are old leases so as I said there is zero incentive.

CHK is scrambling to get their new 5 year leases secured or they lose them.

We want out. It's a new game now.

Permalink Reply by Kathleen on April 14, 2012 at 12:30pm
I'm sorry to hear that JK. I really wish there were ways to get out of leases like that. We had a 37 acre farm in mahoning county Ohio with a 99 year lease on it so I'm pretty sure our 19 acres with a new lease will bring us more of a benefit in the long run due to the lease language.
There are so many farms held like yours. We need NG prices to go up. When the world catches up to the fact NG is plentifull and builds stations to fill cars I'm willing to jump on that bandwagon. It helps our communities, neighbors, the country and a huge chunck of PA. I would think PA would be a leading force in pushing for this to start happening.
Permalink Reply by JK on April 14, 2012 at 12:46pm

Kathleen,

There ARE ways to get out of old leases as we have discovered.

I am not at liberty to say the details now.

When I am able to reveal how, I am sure folks will be wanting to know.

We had to go out of this area to find this knowledge and help.

All I can say is my dad was right in the actions he took.

Nuff said. 

 

Permalink Reply by ML on March 14, 2012 at 12:32pm

I would think pipelines and other infrastructure would be more difficult for a smaller company to develop?  A well is worthless if the products cannot be transported.

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service