Trying not to get ripped off.

We are almost ready to sign a lease with chevron in Greene county PA. we have 6 acres of leasable property and we will only be about 400 yards from the drill site. Chevron is offering us $3000/acre and 16% gross royalties. I have added an indemnification clause and a no surface operations clause. We are waiting to hear about the depth provisions that I want which are leasing from the bottom of the Tully layer to the top or the Oriskany formation.

What I want to know is does chevron really NEED our land because we are so close or could the just "go around"? Any help would be greatly appreciated!

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Permalink Reply by Mary on September 13, 2014 at 10:18am

We are in Sewickley Township, Westmoreland County, PA and have 6-acres that remain unleased at this time. Chevron has offered us $1,000 per acre ($200 per acre per year for 5-years) and only 14.5% royalty with expenses to come off of that. We went back with 17% with expenses or 14% with no expenses, $2,000 per acre ($400 per acre per year) and a 'no orphan clause' on the 6 acres. Landman came back with $1,000, 15% with expenses and will agree to the no orphan clause and non-surface lease. Our 6-acres would be included in a 5 horizontal wells in about a 400 acre unit. Landman states that this is really 'dry gas'. They also want the Lease to include all layers down to the center of the earth. I know that all of my neighbors are getting either 12.5% or the ones that signed after 2009 are at 15% with expenses. Any thoughts are greatly appreciated! Mary

Permalink Reply by Amber burkett on September 13, 2014 at 11:40am

Hi Mary.

From what I understand is that people are getting more money for the dry gas, at least in Greene County, because it is less expensive to treat than the wet gas. There are peopl on this site that are more knowlegble than me. They may set us straight.  Btw, what is a 'no orphan' clause?

Permalink Reply by Mary on September 13, 2014 at 12:59pm

Hello Amber...the no orphan clause is another way of saying that the gas company must include all six acres in the unit or share the total of six acres in between two or more units. Sometimes, they'll only use a portion of your land in a unit and therefore you're only paid for the acreage used, not all the acres that are leased. We used this on our 50+ acres in another lease and although they've only used about 30 or 35 acres, we're being paid based on the total 50 acres that are leased. So consider throwing the no orphan clause in there as well before you sign. Best of luck!

Permalink Reply by DONNA M SELLERS on September 13, 2014 at 1:19pm

Wish I had heard of this no orphan clause(and a lot of other stuff over 3 years ago when I signed my lease with CHK in Greene county Springhill township. Started out with over 17 acres now only getting royalties for less then 10. 5 acres are in suspended in  title, still have no idea what that means. Anyway Rice bought it last month and I was told they do all their own title searches etc. Quite frankly sometimes I wish I hadn't inherited this. Also rumored that Rice is putting more legs on the well. Does any one know if I will now receive DO from Rice since they are doing their on searches?

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on September 13, 2014 at 7:49pm

Amber,

     Take a look at your property on the PA Well Interactive Map to see which drillers are closest to you. That will tell you if Chevron, Rice Energy or another driller is the closest to your property.

http://www.depgis.state.pa.us/PaOilAndGasMapping/

I have the Rice Energy contract if you are interested in making a fair bonus.

You can never be sure who is calling you or at your front door. When money is involved people will pretend to be with a major driller when they are actually a landman/middleman who wants your signature so they can run off and sell your lease to the company you thought they represented. 

"Money Brings Out The Worst In People" , Your potential wealth that they want.

Permalink Reply by Amber burkett on September 14, 2014 at 9:58am

I found my property, now how to do I see who is leasing what?

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on September 14, 2014 at 8:26pm

Amber,

     Select Unconventional Wells in the Oil And Gas Well Layers section in the left hand column.

Select Oil, Gas, Combined Oil & Gas in the Well Type column.

Select Active in the Well Status column then use the Plus sign above the map to locate you land.

Look for green dots representing drilled wells in your area, then put the cursor on a well, left click then click on i above the map and click on the well again to identify the well, driller and other data.

PA doesn't use horizontal lines to show where each lateral was drilled. Ohio and WV make it easy to see which wells have laterals under your property. Maybe PA will do an update to a better map in the future.

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