Scare tactics or fact? Is Eclipse right?

Just received a second call from eclipse. The first call 2 months ago was to notify me that eclipse would be calling me with a new proposal on my existing lease with Oxford/Eclipse. Here is the scenario. 156 acres, Millwood twp., Guernsey co. Signed with Oxford 4 1/2 years ago, for nothing upfront, 12.5 % net.

My call today was threatening to say the least. "We are offering you 12.5% gross, no bonus, and that if we fail to re sign with them, we will not allow our lease to go by the wayside. My boss has paid too much money for this acquisition to let that happen, and we will put a shallow well on your property to lock in your lease  and you will receive nothing." I have to say, we have been anticipating the new tentative lease we signed 2 years ago with Turner Oil, and this call today has not been a mood elevator. Can anyone suggest what we should do now. Our lease will expire in March.

I read from 1 blogger, Tom, that he told them to come back with a different offer, and they did. I know it's just business, but I take affront with this kind of forceful tactic, especially with Oxford doing what they did, (meager 10.00 / acre/yr./ 5 yrs.).  I feel like I am going through the wringer 1 more time.

Any direction guys would be greatly appreciated.

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Permalink Reply by gary smith on October 4, 2013 at 12:05pm

call them back and tell the that you are offering the fractavists a place on your land to set up headquarters.

Permalink Reply by evan on October 4, 2013 at 12:32pm

That's bull S.  They wont drill a shallow well.  Chesapeake threatened that also but they never did. Tell them you want a shallow well and sooner the better.  Use reverse psych on them 

Permalink Reply by Airman on October 6, 2013 at 1:47pm

Thanks Fang F Fang. I have been following you a lot on these discussions, and I tend to believe you. I know I should be more proactive since so much is riding on this, so all these comments have eased my distress somewhat. And, yes, I have an appointment on Tuesday with an attorney in Cambridge. Appreciate all the insight.

Permalink Reply by Philip Brutz on October 7, 2013 at 5:16am
Permalink Reply by Philip Brutz on October 4, 2013 at 1:14pm

If you do accept their offer make sure that it really is "Gross" http://gomarcellusshale.com/forum/topics/beware-of-all-the-gas-comp...

If you need a good attorney I would recommend David Bennet in Cambridge (740)439-2719, He helped me with my MarkWest ROW.

Permalink Reply by The Hiker on October 5, 2013 at 2:47am

Does your Oxford lease limit pooling to 160 acres?  Many of them signed 4 years ago do...and Eclipse can't use your acreage to drill a Utica well until you agree to sign an addendum giving them the right to expand the pooling clause.   Get a copy of your lease from the courthouse if you don't have it and read it.  This is worth some big bucks to them to get that addendum and you should expect some of those bucks for yourself if this is the case.  Get a good attorney.

If not the case, and your Oxford lease allows 640 acre pooling, then I agree with Chip.   Oxford has many leases ready to run out and not enough time to drill them all.   If I'm not mistaken, there is previous case law that prevents them from just parking a truck on your property, or pounding in a few stakes, and calling the well "started".  Get an oil/gas attorney that only deals in oil/gas issues, and not a "general attorney" that also does divorces, real estate, trusts, etc.... 

Permalink Reply by Tim Tarr on October 5, 2013 at 4:18am

My boss has paid too much money for this acquisition to let that happen

Tell them "Their boss needs fired They seem to make poor decisions. You didn't get any money so they didn't pay you too much."

Does your lease entitle you to "free" gas? Some of those pre-2010 leases do. Might be to your advantage to get shallow well. Make lemonade from that lemon. 

Sure they can dill a "Shallow" well but they have to put it into production at some point. Review your shut-in and delay rental  clause(s).

How close is a gathering line? Even if one is close by they probably need compression to feed that gas into existing lines.  Those gathering lines are not cheep. Especially with all the demand for new ones now.

I believe there is case law that limits the strategy of non-producing HBP. "HBP for speculative purposes". Would be well worth paying a Competent Attorney to review your lease.

  

 

Permalink Reply by Jim Litwinowicz on October 5, 2013 at 3:52am

I would suggest that you also work with your neighbors. See if they are facing similar circunstances and threats. If you can get enough of them together then Eclipse would face the prospect of drilling a lot of vertical wells to hold a lot of leases....very expensive and time consuming.

Permalink Reply by searcherone on October 5, 2013 at 4:19am

Next time you receive a call or visit ask if it is a "real" offer and tell them if it is to put it in writing. That will stop the "tone" of you aren't going to get anything.  Eclipse or any other company doesn't want the "tone" in writing.   And if you receive a written offer you do not have to sign it. The calls are done to undermine your confidence and wear you down.  That 156 acres is yours, be strong, time is running out for Eclipse.

Remember their lease is running out and they have to work it out with you, they should be very cordial to you, not giving you the "tone" and lol you can insert an eight letter word starting with a "b" for the word tone if you want. 

Permalink Reply by Trapper on October 5, 2013 at 9:28am

It is sickening to hear stories such as yours. Thank God I have have not had these type of bad experiences with my lessees. I guess there are a few bad eggs out there. My heart goes out to you.

Albeit difficult to do , maintain your composure and find an experienced lawyer to handle these charlitans for you!  Good luck!

 

Permalink Reply by Trapper on October 9, 2013 at 11:18am
No. Just a landowner.
By lessee I mean the companies I have been leased to. So far I have been treated well by Shell. Just not drilled yet.
Permalink Reply by S in WV on October 16, 2013 at 4:16am

I am having such a difficult time finding an experienced lawyer in my area. Either they are located too far away or they aren't very educated in the field. If you can recommend anyone from the Wheeling, Moundsville, Morgantown area I would greatly appreciate it!

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