Re-Leasing / Renewing of Lease of Property in Tioga County, PA ?

I am trying to get some information / status of property leases expiring in Tioga County, PA. I have a 5-year lease (East Resources Lease) that expires in June of 2013. I am NOT currently in a unit, nor does it look like I will be by the time my lease expires. Is Shell, or anyone else, renewing leases without being in a unit - or are they just letting them go without releasing property if not already in a unit? Any ideas?

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Permalink Reply by Brian Day on July 30, 2012 at 12:46pm

It depends on where you are located.  I think that they are generally still interestedin keeping most leases.  A few areas have had problems with faults or other issues, I have heard.  I've heard some rumors of a problem area in Farmington Township, but I don't know the specifics and for me it is just a rumor.

Permalink Reply by Jack Straw on July 30, 2012 at 3:16pm

Are you happy with the terms of the lease you signed in 2008?

Does your existing lease have provisions for the renewing of the lease at the end of its initial term?

Do you consider that you could obtain better terms in 2013 from another operator?

You have ten months before your current lease expires.

Depending to the answers to the above questions, you may wish to contact East Resources in (perhaps) three our four months time, and enquire about their intentions. If desired and it is appropriate, that might give you six months to test the market to determine if there is competitor interest.

Should East Resources chose to drop the lease, make sure that they submit the necessary paperwork at your county court house attesting to the forefiture of the lease.

Just some thoughts,

                                 JS

 

 

Permalink Reply by Michael Reid on July 30, 2012 at 10:25pm

Thanks much for everyones feedback. Looks like I'll pull out the current lease and give it another going-over. They are still heavy into the seismic testing again in our valley - have 3 of those machines on my small 12.5 acres now. Fun part is figuring out who is doing what with all the changes, turn-overs and such. As for East Resources, I don't even know how active they are any more here. Seems most everything on their end was turned over to Shell.

Permalink Reply by Frank Walker on July 31, 2012 at 12:29am

Yup.  Ten months plus is a really long time; might as well be an eternity!!

And commencement of operations sometimes can mean as little as parking a bulldozer on the property.  That's exactly what happened in Sullivan County to one couple there.  They challenged, litigated, lost, and had to cough up court fees.

Don't count chickens. 

Permalink Reply by Michael Reid on July 31, 2012 at 9:28am

Hi Frank, no, certainly not counting chickens or eggs at this point...... actually, I'm more thinking from rumors that I'm pretty much done on leases or any unit. LOL.....

Permalink Reply by Brian Day on July 31, 2012 at 2:36am

You never mentioned your township or area.

Permalink Reply by Michael Reid on July 31, 2012 at 9:29am

Sorry, Brian (and the rest reading), I'm in Tioga County, Middlebury Center, PA

Permalink Reply by Brian Day on July 31, 2012 at 11:24am

Odds are pretty good you will continue to be leased in that area.  Marcellus plus some Blackriver/Trenton.  Who knows about the Utica or other layers at this time.  Shell isn't talking.

Permalink Reply by Frank Walker on August 1, 2012 at 1:06am

Oh, Tioga County!  I had no idea.  Makes a huge difference.

Sure, I agree with Brian.  Michael, you will get drilled for Marcellus.  Some day.  Right now, the way things are, I have no clue when.  Too many variables.  If your lease cost 'em a lot of money (big bonus) chances are they will try harder to hold it.

Utica?  In Tioga County, PA!  It would surprise me if the Utica were prospective that far east.  But, hey, you never know.  Not for many years, I suspect.  Gotta drain the Marcellus first.

As for me, I always wonder what's below the Utica.  :-)

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