LEASING!

Hang in ther folks!   Im thinking 4000 to 6000 per acre in 2012. 

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0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 21, 2011 at 5:42pm

Kathleen, is that with Chesapeake offering the 500....I saw a discussion recently about that (either on the main board or in Sullivan, Pa .    There was still 1 and 1/2 yrs on primary term and the oil company sent a letter to extend the term I think two years at $500 per acre.

Permalink Reply by owner on December 21, 2011 at 12:33am

Hi Eric, what information are you basing you thinking of 4000 to 6000 in venango county?   I know that they did alot of sesmic testing last year in the county and afterwards all the lease offers started to come in and the bonuses went up. 

2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on December 21, 2011 at 12:54am

Pretty general statement there , eric.....

Any specifics like state , county , boro or township...........?

Seems to be close to the current range of offers as of today in W.PA & OHIO..............?

Are you predicting stagnation then...............?

Permalink Reply by Joe on December 21, 2011 at 6:06am

Mike Knapp I'm afraid I don't agree with you. Can you give more details of your company? What kind of leasing do you do? How many employees do you have? What is your level of expertize with O&G leases? The way I see it a lessor may not even make it to the second  term and bonus payment. How you say? By the force Majeure clause on most of the leases I've read. Here's a link to Chesapeake's own web site explaining how the force Majeure clause can be evoked.

http://www.askchesapeake.com/Barnett-Shale/Leasing/Pages/Force-Maje...

In fact they've already started. Here's a link to show you.

http://gomarcellusshale.com/group/tiogacounty/forum/topics/landowne...

Hundreds of local landowners have received letters from natural gas companies over the past two years claiming "force majeure" on their expiring leases, many of which are a decade old and signed for just a few dollars per acre.

Here's another link

http://gomarcellusshale.com/group/Belmont/forum/topics/force-majeur...

I am a landowner and was in a 5yr lease ageement that has since come to term without any wells being drilled or any that were even applied for at the ODNR.  Just prior to the end of the 5yr lease agreement, the gas company that I had the lease with sent me a letter claiming force majeure due to coal mining in the area.

Some leases do have what seems like more land owner friendly leases with limits to how long they can evoke the force majeure clause. This is from one of the Ohio leases I have a copy of. Although It has such favorable land owner language in it I wonder if it was ever successful. I'll include a copy of it.

and so long as Lessee is prevented by any such force majeure event from conducting drilling or reworking operations on or from producing oil or gas from the leased premises. The period of
extension by reason of force majeure shall be limited to a cumulative total of thirty-six (36) months.  

cop

Just the other day I was checking out some links to news articles of different O&G company's evoking the force Majeure clause for various reasons. 

I'm not going to look them up again for this reply. I think that a lot of people are going to be upset at the end of their primary term when the O&G company evokes force Majeure because of just about any reason they can come up with to keep from paying the second bonus, Shortage of drilling rigs, shortage of materials, trucks, permits, etc. You name it because you, your land group, or your attorney over looked or didn't understand or didn't think they would.


 

 

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3uq96odaochmjPermalink Reply by 3uq96odaochmj on December 21, 2011 at 6:19am

From my understanding, a company can only evoke "force Majeure" after the borehole is drilled, formations completed, production established, and then ceases. 

Permalink Reply by Dave on December 21, 2011 at 9:26am

Mike Knapp

you are being to modest......

that was a great op=ed piece on frac water that you wrote

good luck with posting your resume on here

good luck with business

drill baby drill

Permalink Reply by Dave on December 21, 2011 at 12:08pm

merry christmas mike & the rest of your crew

 

Permalink Reply by Joe on December 21, 2011 at 7:33am

Wrong Jasper. Follow the link in my previous post to Chesapeakes  web site and the other links.

Permalink Reply by randall gottus on December 21, 2011 at 5:23pm

Mike K ...your recent response ... "THAT TIME CAME ABOUT A YEAR AGO"... may very well be true.  Alot of my discussions/contacts/resources are saying the same thing.  Sometimes waiting does not always guarantee that.....

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 21, 2011 at 5:51pm

Mike Knapp...appreciate your input here...

there is no force majeure clause in my lease contract...yet there recently was a contract amendment sent by the oil company rep to add that clause...but he didn't call back after I contacted them about what they sent.

CAn a force majeure clause be implied if not on contract?

can that be used while waiting for a pipeline feed to the main transport as there isn't any yet of both...

I did see on my contract the statement of Extension of term states: "'or by drilling a well on the Leasehold or on lands unitized or combined with the Leasehold which is not capable of production in paying quantities."

Hadn't noticed that before... does that mean that it doesn't have to be in production or produce to extend the lease term?   or is that a description of the lease without the well but the land acreage is unitized to where there is a producing well though not in production?   tough way they describe it.   I read what you wrote about it is difficult to extend the lease without production

'And it cannot be held for any long amount of time without production.  The courts have been very clear on this'

...but that clause says it can be extended by another payment of compensation or by drilling a well as stated above.

any comments will be appreciated about such.

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 22, 2011 at 7:22am

thanks Mike...

I appreciate your comment.    I looked again, it states if the well IS NOT CAPABLE of production in paying quantities.   I guess they are stating that if they drill a well either on the leasehold or lands unitized and that well is unable to produce enough in paying quantities (I assume that it wouldn't produce enough to make it worth their while...then they are saying that they can extend the lease thereby locking in the lease for an additional five years.

here is what the entire clause states, :

EXTENSION OF TERM:   Lessee may extend the primary term for one additional period equal to the primary term by paying to Lessor, at any time within the primary term, proportionate to Lessor's percentage of ownership, an Extension Payment equal in amount to the compensation received by the Lessor for this Paid Up Lease, plus Two Dollars ($2.00) per net mineral acre, or by drilling a well on the Leasehold or on lands unitized or combined with the Leasehold which is not capable of production in paying quantities.

 

by the way, some of you have mentioned that you have been getting offers from Chesapeake for $500per acre to extend your primary term for an additional two years yet you are still in your primary term....so take a look and review your extension of term clause if you have one before taking that amount.   Pls do find an oil and gas attorney who has time to help you...I have contacted 3 and have not heard back and it has been a week.

 

 

 

Permalink Reply by Joe on December 22, 2011 at 2:16pm

The sad truth seems that their are a whole lot of land owners that have signed a lease are soon to find out that they thought they had the money in the bank because they finally signed a lease. Some after over a year negotiating through land owners  groups or even by them self's. Well I hope I'm wrong but I've been reading this site and others for many hours per day for awhile. Now it looks like a whole lot of people are going to be sadly disappointed to that have waited 3 months or more only to find out that some loop whole has let the O&G company change their minds and back out of that contract.  Wait! Wait! Wait! didn't I read on here that you sign the lease but they don't!!! What's that mean? Think about it. Any time after you sign the lease obligating your property for ever they still have the 90 working days to change their minds. They the lying land man told you the only thing could go wrong was if they found out you didn't own the O&G rights after the court house search. Read the post on here about the people who haven't been paid past the 90 days. Do they have a signed lease to go to court  with? Hell no. As fast as we hire lawyers to figure out the double talk the big money O&G has the high priced attorneys figuring out the next loop hole they can use. As has been said in here many times before one word in a paragraph can change every thing. 

Thing about it. Think about it. Big money rules. That would include our government that's suppose to be looking after us. Don't you wish down in your heart we could afford to tell them to stick it up theirs until they come up with plain language lease we can understand. Let's move on to legislation to burn at the stake any land man that is found guilty of lying and deception.    

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