payment for well pads

I'm interested in information about how much land owners are paid for having wells drilled.   Neighbors (about 1 1/2 miles from me) were approached yesterday by a company that wants to set up two well pads on their property.  The reps will be returning to look over their property next week.  The wells are to be drilled next year.  I advised them to get a good lawyer as soon as the company offers a contract.  But I'd like to get them as much reliable info about the whole process and the value of having the wells drilled.  Thanks to anyone who can help. 

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Permalink Reply by Paul Martinelli on May 30, 2014 at 8:05am

20-35K  per pad.

If the wells won't include any of your acres (meaning no  royalties), I would want a yearly rental fee.

Permalink Reply by Philip Thackray on May 30, 2014 at 8:12am

What Paul M said.

Plus, I live right next store to a well pad.  You don't want one on your property.

The ONLY advantage to having the well pad would be as leverage (negotiation) to guarantee that all of your acreage in a production unit.

And I repeat, you really don't want a well pad on your property.

Phil

Permalink Reply by David Mohn on May 30, 2014 at 8:27am

Philip, may I ask why you don't want a well pad?  I know during the drilling it can be a mess and noisy buy when I drive by well pads they look clean and kept up?   Just wondering.  Do you have a well pad on your property.  Thanks

Permalink Reply by Philip Thackray on May 30, 2014 at 9:38am

David,

I live next to a well pad.  See here:

The gray building is my stable and the horses in the distance are grazing on my fields.  The drilling and fracking are quite noisy and the amount of traffic is unbelievable.  When everything is done and in production there is always one or two trucks in and out every day.  The wells are rather loud when in production.  The heater make a strong "flaming" noise.  Sounds like a train not too far away - all the time.

Here in Western PA rarely are all the wells drilled at one time so they will be back.  Also, we have multiple shale levels here so they will be back many times over many years.

There is no advantage to having the well pad unless you can use it to get something.  But since the surface rights are usually determined by the original lease, you may have no leverage.

I am upwind from the well pad and I would not want to be down wind where you would hear more noise, smell more smells and get more dust.

Otherwise.....  LOL!

Phil

 

Permalink Reply by David Mohn on May 30, 2014 at 12:41pm

WOW didn't know the could put a pad so close to your buildings.  Back in 2011, CHK staked out a pad but it was about 100 yds from my barn and even further from my house.  They have not been back and I am sometimes temped to build a barn where CHK picked to drill.  Haven't done it yet, but thought about it many times.  They were going to include about 50 out of 65 acres of my farm in the drilling unit.  I have VERY mixed feeling about a pad but I signed a lease that gives them surface rights. 

Permalink Reply by Bill Barnaby on May 30, 2014 at 11:54am

Unless you NEED the money, don't do it..... that pad will be there for a long long long time, that money will be gone in a year. They're very loud, and ugly!

Permalink Reply by jason irvine on May 30, 2014 at 1:40pm
They would basically have to buy me out of my top side. Not many people would like to live with one near by.
Permalink Reply by Donald on May 30, 2014 at 3:01pm

don't know if you read my earlier post about well pads? I agree with the posts about dirty noisy, you really don't want a well pad on your property, but most leases gives the o/g co. the right to put it their anyway. most will pay 25 to 30k for a pad but that's like  selling  5 acres of your land for 5k dollars an acre and look at an eye sore for the rest of your life .and yes you can have a well pad on your property with 10 wells on it and not be getting paid, that is like dumping salt in the wound. if you have an opportunity to negotiate the terms of a well pad, I would insist on a percentage of everything that comes through the pad..... not just what is in your unite.   

Permalink Reply by David Mohn on May 30, 2014 at 3:06pm
That a good idea to get a percentage. What is a good percent to get
Permalink Reply by Donald on May 31, 2014 at 3:48am

I would be thinking 4 to 5% for anything not in your unit, that would be gross with no deductions.

if you are sitting on your porch looking at a well pad that is producing millions of dollars pr. month, and your not getting paid, I think it would be a very bad for your health.

Permalink Reply by jason irvine on May 31, 2014 at 8:36am
I agree. I own 80 acres and just to sell 5 or 10 or even 20 wouldnt do me any good. If you live there or even hunting property it ruins the idea of quite country living. The problem is how much is that worth. I suspect if you talk to 1000 people you will get that many different amounts. I'm not sure if leasing or selling or both and at what percentage . I wouLD probably estimate the amount the pad would bring in. All the wells. And try to come up with a fair percentage. I hope that they would have little options in the area. I would hate to get nothing and end up looking at it anyway. Good luck

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