Well Pad Compensation

Hi folks, this is my first post on this enlightening forum.

I am in the early negotiations for a well pad on my farm, and was wondering what a typical compensation would be for that acreage CHK mentioned $2000 / disturbed acre as an average arbitated figure. This is in Carroll county Thanks for your replies

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Permalink Reply by Janice L. Hancharick on November 27, 2012 at 1:47pm

I'm glad you replied Suzan. People need to know GOOD things do happen in the world of drilling.  It's a solid lease that sets the stage.  $15k was a modest amount to be settled on, and it takes more than $$$ to keep folks happy with what they signed for.

Thelma is not the first person to be unhappy with a lease experience.  Knowledge is a strong tool.  Prior knowledge even stronger.

Permalink Reply by Mark Dolezal on November 30, 2012 at 1:25pm

Seems low, alot of leases today are paying 25k-30k for a 5 acre well pad.

Please remember you will not get that property back to use in any way once limestone pad is built. I would really like to see landowners treat this like a commercial ground lease. They should be compensated annually as long as the pad and well are still there.

This could generate income for the landowner for 40-50years. And if the well is no longer productive they will have an incentive to close and clean up site if they have to continue to pay an annual lease. Something to think about landowners !

Permalink Reply by kdj on December 1, 2012 at 1:05am

I'm glad you mentioned this annual lease idea, have been thinking the same thing. Is this being done anywhere?

Permalink Reply by Janice L. Hancharick on November 24, 2012 at 6:09am

Fang is in the right ballpark. He was also right to mention access road. Consider liability factors, your loss of income if the total acreage involved involves marketable timber, cropland, pasture value, etc.. I'm not familiar w/your farm, but these are a few things to consider.  What % of your taxed acreage will be involved and for how long? Who will be paying the taxes on the acreage needed?  Will your insurance stay the same when this is in place?

Research everything. Get thee to a group that has professional legal help for its members, or hire a lawyer on your own.  Just be sure he/she has ample experience in gas/oil law.

Permalink Reply by thelma cathleen hays on November 27, 2012 at 1:12am

kdj,  you need to also ask about all the production equipment.  We have a pad and with all the production equip. there not much thats going to be reclaimed. Our pad is 7 acres. Our lesse allowed for payment of $15k . If we had do a chance for a redo, would never had sign for pad on our property its not worth it at all. There is alot to deal with so make it worth it.

 

Permalink Reply by Lorie on November 27, 2012 at 9:41am

One thing that the landowners neither considered nor have thought about when they are receiving this 2500 an acre, the product they want is yours. They wouldn't have anything to produce if it weren't for the landowner having the gas and/or oil and to only give 15% of what is yours to you.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on November 27, 2012 at 2:36pm

kdj,  I have seen contracts with a $30,000 "Spud Fee" which is payed each time the well is fracked after the initial drilling & fracing. See alov.us for the latest contract that with a spud fee.   Ron 

Permalink Reply by lynn on November 27, 2012 at 4:34pm

Ron-never heard of contract that gets extra spud fee for additional laterals or fracing-only for additional pads and extra for additional acreage over base pad acreage.  ALOV contract from 2011.

Permalink Reply by kdj on November 28, 2012 at 12:51am

I'm thinking we have a 15k spud fee for the first well and 2k ea additional well

Permalink Reply by Keith A Williams on November 28, 2012 at 5:36am

KDJ,

The 2K per acre is on TOP of a spud fee. It is for damages. Make sure you check that out before you sign any paperwork.

Keith

Permalink Reply by rmc on November 28, 2012 at 12:48pm
Our lease in Greene County calls for 20 thousand dollars for a 4 acre pad and for 5 thousand dollars an acre for each addional acre disturbed this includes any access roads and pipelines to that drilling pad.
Permalink Reply by Lynn mudder on November 30, 2012 at 3:14am
Can you say who you are leased with and what twp?

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