NELA leases in NE Trumbull County

Does anyone know what's going on with the NELA leases in Trumbull County?  I've had mine for about 15 months.  The Lennington well is about 3 miles from my land, there are two permitted wells in Mecca, one in Vernon, so things are going on all around, but I have heard nothing.  Back in April BP mistakenly sent out letters about surveying to landowners whose leases they didn't have (yet at least), and when I called them, they apologized and said they would be drilling all over there by mid 2014.  When I contacted NELA at that time they said they were in "serious negotiations with BP".  That was the last I've heard.  Just wondered if anyone knew anything.

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Permalink Reply by Kyle Toman on July 14, 2013 at 2:21pm

NELA does not pay anyone. They represent.... Almost like an agent. They get paid (a percentage) when you get paid.

Permalink Reply by Howard Wolfe on July 14, 2013 at 2:21pm

No, I don't get paid until they ink a deal with a gas company, which I have not been notified of at all.  I assume it's that way with ALOV and any other landowner's association, you don't get paid until they get paid.  In fact, that's what BP said too in April, as if I didn't know, he said when we make a deal, we'll pay them, they'll pay you.  Oh and it's an actual lease.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on July 14, 2013 at 4:02pm

So you signed a lease for free, essentially.  NELA has you tied up for a specific amount of time and you cannot lease with anyone else.  So you signed a lease for $0.  Eventually you may get paid, but until then you gave away your lease rights for free.  That's why many landowner's associations are considered lower forms of life.  

Permalink Reply by Howard Wolfe on July 14, 2013 at 4:18pm

well this is my opinion on that.  Again, it's just my opinion.  It was a landowner's association or wait for some landman from BP or whatever oil company to come knocking.  Now, the landowner's association gets a percentage of my signing bonus, so it is in THEIR best interest to get the most per acre, plus they have the leverage of ALOT of acres.  The gas company?  It is in THEIR best interest to pay me as little as they possibly can, and at that point, it is either take what they offer or what for some imminent domain deal and get even less.  That was a no brainer to me.  I've seen every mineral rights lease there ever was on that land (all clearly expired long ago), its been in my family for well over a century.  No one ever got paid anything up front so why should it be any different now?  I went to a meeting last year, neighbors of mine said BP had already offered them $1500 an acre.  I think when ALOV signed it was something like $3500 and the going right down in the heavy counties right now is about twice that...so really I don't think I went wrong not waiting for BP to make me an offer.  Again, this is all just my humble opinion.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on July 14, 2013 at 5:10pm

Howard,

You're entitled to your opinion, of course.  The problem is that landowners have fallen prey to this false dichotomy that is created during the boom times.  The options you listed were not the only ones available.  You were not expected to simply take whatever offer the BP landman gave to you.  You had the ability to negotiate on your own and watch what the market was doing.  The landowner group is for certain taking a cut of what you get.  That is set in stone.  But it is entirely possible that you could have timed the market right, waited for the ALOV deal to hit the wires and then make yourself available to BP independent of any group.  At which point you'd be getting BP's best market offer.  Some people did better than ALOV on their own.  Some people did worse.  The problem is that the BP position is very, very large and they have a mass of inventory.  Look at how much acreage CHK has been trying to jettison lately.  They have more supply than they are capable of drilling.  BP has made what we peons view as substantial investment here and the truth is that what they've spent so far is a rounding error in their end of the year bookkeeping.  So if they don't like what they see they'll dip out and leave with little regret.  If they like what they see (I have a feeling the geology is a little better than initially thought) then they'll drill their inventory.  Being in a group with 100,000+ acres is a huge hinderance at this stage in the game. There are maybe two or three companies out there that can take down that size of a deal.  If BP's first few wells are good (but not great) they'll drill what they have and book the added reserves to their massive inventory.  If the wells are spectacular (unlikely given the nature of shale plays) then your NELA group will be sitting pretty.  If the wells are marginal then that's game over.  To me that's too much risk.  But I'm a more conservative investor and I stopped gambling in my mid-twenties.  I hope--I genuinely mean this--that your decision works out best for you and your family.

Permalink Reply by Howard Wolfe on July 14, 2013 at 5:35pm

Very well thought out, truly.  All I can say to it is these two things.  First, how would a peon like me know what options I had, I'm not even that smart now much less 15 months ago, second, even if I knew I could negotiate, that's not my expertise at all.  Kind of like playing the stock market myself.  Hit or miss since I'm not a stock broker or in the business.  Sure people have made mega millions doing that, and lost the same.  Overall people are safer entrusting it to a smart investor for a small fee if they don't have the time or true savvy to do it themselves, and I have neither.  If I get nothing out of this I am no poorer than when I started.  The only other thought is that I would think that just because NELA has 110000 acres, if it doesn't look like they will cut a deal for all of it I would at least hope they would try to deal part of it in some areas to get some $ for themselves.  And I do very much realize it's up in the air right now overall as far as how well things will go, but I thought perhaps with wells going up all around the area something might have happened or happen soon.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on July 15, 2013 at 1:43am

Believe it or not this is why attorneys exist.  Well, some of them.  Others exist to be scoundrels, but that's another conversation entirely.  Locating an oil and gas attorney 15 months ago would have given you the opportunity to do things differently.  Just as you'd use a stock broker to help you play the market the attorney would have been in a position to know what was going on at the ground level and advise you accordingly.  But hindsight, I suppose.  At any rate, we're all just speculating at this point, so I'll leave it at that.  Be well.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on July 15, 2013 at 2:51am

I agree with you.  I've never liked the group mentality but I truly do see the appeal.  For landowners it's 6-5 and pick 'em.

Permalink Reply by Howard Wolfe on July 16, 2013 at 1:42pm

Aside from the thought that ALOV may have left a lot of $ on the table, which to me actually seems true considering the going rate, there are a couple untruths here.  I know positively that the ALOV acreage was not in one area whatsoever.  I have neighbors in Johnston Township who were part of the ALOV BP deal, their  acreage adjoins mine, I have friends in  West Farmington who were ALOV BP, which is 15 miles to the West.  Even if I were to believe alone that ALOV had everything in between, which I surely don't, I know better anyway because my property sits in between the two!  I'm sure the ALOV land was quite spread out also.  As far as BP tossing 20000 acres, this is what I have seen officially.  If someone can show me something other then hearsay to the contrary I will believe it.  The ALOV/BP deal was for 84000 acres.  Of that, they later dropped 4000 over issues of pre existing leases and producing wells.  I haven't seen that they have "tossed" any other acreage to speak of.

In retrospect, maybe I should have procured a mineral rights lawyer and had them negotiate for me.  Obviously I am far from the only one who didn't think it would be that complicated or NELA would not have 110000 acres.  So it's a wait see.  If I get lucky, awesome.  If I get screwed I get what I get which is more than I had, and I know better next time if/when they come back for the Marcellus or whatever else they might discover.  To be honest no one has given me a solid reason other than what they think to lose faith.

Permalink Reply by Howard Wolfe on July 16, 2013 at 3:13pm

Again, hearsay.  I've been to the recorder's office.  Go there and ask for anything in person other than book x page y.  Wrong.  They will tell you to get a title company.  Nothing against them, they don't have the people to look up searching your requests, they have every deed, lease, lien and mortgage in the county for a couple hundred years.  Show me something, not just "that is a fact, not what I think".  Because at this point Fang, you just saying it lacks credibility.  I can show you articles quoting BP officials about the 84000/4000 acres.  That means something to me.  You just saying it, your opinion no matter how much you say "fact".  SHOW ME PROOF.  Show me a document saying BP has released, what did you say, 20000 acres.  Show me ANYTHING that says that other than you saying it.  Really.

Permalink Reply by Howard Wolfe on July 14, 2013 at 2:39pm

I have a lease, as I said, I am looking at it.  It's fully executed, signed March of last year and recorded at the Trumbull County Recorder's office (I checked).  It's fully functional and valid.  The question is not whether I have a lease or not, but if anyone knows what is going on with the acreage NELA has under lease, if anyone knows anything about them finalizing a deal with BP or any other gas company.  And they most certainly do negotiate with landowner's association, they did with ALOV for 84000 acres last year, I have no doubt they will with NELA for their 110000 acres.

Permalink Reply by p umpjack on July 14, 2013 at 2:48pm

NELA's main spokes person is a purple squirrel

I do believe they are a anti fracking group that pulled a major coup in OHIO by duping landowners and signing marketing agreements that have you tied up for a lifetime

They have not executed a single deal for a landowner anywhere........

 

good luck

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