Is anyone in the group knowledgeable about current events, particularly near Overbrook Road?  What type of unitization is in process for what well?

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Thanks FairMkt.

I think that (Kennedy) might be the one, surmising from all the information you all have generously shared here.  Still learning. I guess they have to finalize a unit before they begin the work/drilling?

The Kennedy is closer to you. REX probably knows exactly where the unit boundaries will be right now, but it won't be public knowledge until after the first wells are drilled. And that won't be for a while, the site is in it's earliest stage of being developed.

The storm water permit for the pad is still several weeks from being issued. Then it takes a couple of months to build a pad. It could be a year until a unit is declared there.

And from what I can gather' the Reno unit is completed, so it wouldn't be that one.

Many times they modify the units after they are declared. They have the right to make them larger or smaller at any time they so choose. The limit is 1, 280 acres per unit.

You are too far away from the Reno Unit to ever be included there. Also the horizontal bores are drilled in the northwest & southeast directions, so you have to look at where your land is in relation to the well top hole.

I think you are southeast of the proposed Kennedy well, but generally you would need to be no more than a mile from the top hole to have any hope of being in that unit. You can measure that distance with the Google Earth map that Matthew Santiago created and posted the link for.

Below is the Reno Horizontal bore to give you an idea of the direction all of these shale wells are being drilled. The angle is always close to this example, weather it be southeast or northwest. I hope that makes sense to you. Click on the map to enlarge it.

 

The map above shows the Reno pad and Unit. The red line is the pipeline that is staked out and surveyed between Reno and Kennedy. Dashed red line is also pipeline heading north, I have been told it is staked at least to Cruikshank Rd.  Rumor has it that there will be a pad at Rittswood and on Powell Rd somewhere.

Kennedy is most likley the next Rex well in Middlesex. 

I would expect that in the next 2-3 yrs well pads to fill in north and south of the pipeline.

I say that because to the best of my knowledge and some research I have done a lot of the bigger parcels along that axis were signed around 2010. I would think that Rex will drill at least enough to lock in those leases.

I am not sure where the North pipeline is going. Could continue north to XTO 's processing plant behind the car dealers on rt 8 in north Penn Twp. Or it could head west toward Rex's concentration in Lancaster and Forward Twps.

The pipelines are something to keep an eye on. As soon as they are connected to a sale point drilling activity should pick up along the line.

Rex's plans were to drill 19 wells and complete 17 in Butler Co. this year. If they hold to something like that next year my guess is more of them will be in Penn and Middlesex. I believe they may have most of their acreage to the west already locked up. 

The infrastructure is close to reaching a critical mass as I would call it. Rex is certainly starting to get alot more gas to market which should make cash flow much better. The next 2-3 yrs could be very hot ones in southern Butler Co, at least in Rex's area.

I really have no idea what XTO will be up to. They may flip some more ground to Rex and concentrate a bit more to the north of Rex. We shall see.

To me the near term looks pretty good!!

Fair Market,

Thank you for your recent update. You and Oliver have been very helpful.  I still can't figure out how we may be impacted or included in upcoming activity.  But then maybe the drilling companies don't want you to.  I was confused on how one company can offer a lease, but another may be drilling.  I guess they buy each other out or flip, as you say.

RB

Couple questions for ya if you don't mind sharing the info. 

You were offered a lease...

By who - Rex - XTO-Other ?

Upfront bonus money - 1500/2000/3000 per acre?

Surface or non surface ?

Royalty % - 15/18 ?

Royalty gross or net w/deductions ?

Term - 5year w/option ?

How many acres do you have ?

Do you know who your neighbors have signed with or if they have signed ?

That is public information, you can find that out by going to the Butler Co. recorder of deeds site which I believe Oliver has posted a link somewhere here but I am too lazy to look. LOL. 

Surprisingly the site is pretty easy to use. Somewhat tedious sifting through the info, and I have a slow internet connection, but still quite interesting.

I will recap what info I have - probably repeating myself as I may have posted a lot of this before.

The best offer I have heard to be signed ( don't know if it has actually been paid yet) was by Rex - 3000 non surface, 3500 surface , 18% no deductions.

That would appear to be the top of the market around here at this point.Not too bad IMHO.

That said -I still think it is a tad low given the potential for the stacked pays - upfront money at least. The 18% w/no deductions - not bad at this point -don't think ya can get much better unless gas prices jump dramatically

Rex is interested in the 20 acres or so that Middlesex Twp has - don't know if they have made a formal offer yet - may be holding back waiting to sign some other properties before Middlesex because that will be public info and may set a benchmark. Can't really fault them for that - smart business - maybe not so good for the landowner - but you gotta do your homework.

Sadly a lot of people do not understand that the lease is a "binding legal contract" and all the potential implications that may result. Just seeing $$$$ - free money. Ain't no "free lunch" in this world. Be careful, "know" what you are signing, have a lawyer look at it .Money well spent.

Huntley & Huntley has been sniffing around making lowball offers and squirreley terms fronting for Range or looking to flip IMHO. Mentioned them to the landman last time he was around and his eyes widened a bit. So maybe not a bad thing.

Near tearm (2-5yrs) I see Middlesex as a hot spot - wells drilled and some landowners starting to get royalty $$$.

More better info - more better decisions !

ps. Oliver, if you would be so kind and if you have the info could you post the Fritz plat and unit if it exists.  I see no activity over there - road has been built but nothing else. I suspect that XTO may flip that to Rex if they have not already.

Thanks

 

FMV,

I will check to see if the plat is available but I don't think it is. I don't think a drilling permit was ever issued and the stormwater permit was canceled in January this year. Also, XTO surrendered the lease on the Fritz property in April. Apparently they will not be drilling at that site. It has not been acquired by REX yet but I agree that REX could be interested.

http://www.co.butler.pa.us/recorder/Navigate.asp?MainMenu.x=55&...

http://www.co.butler.pa.us/butler/cwp/view.asp?a=1494&q=616990&...

Thank you Oliver.

Now that I think of it I do recall hearing about some legal wrangling going on about the Fritz property. The last time the Rex landman was around I believe he did mention something about that. He will be back and if I remember I will ask him about it. Could be that XTO surrendered the Fritz lease but held on to others that would make up a unit to squeeze a better price if Rex wants it. Interesting.

FMV,

The Fritz 1H & 2H plats are attached if you are still interested in what they looked like. I'm not sure how useful they are since XTO applied for these permits over two years ago and never drilled.

Attachments:

Thank you Oliver.

The plats were a bit interesting in that the laterals were entirely within the Fritz property. 

Makes a small unit if indeed that was to be the unit. 

Well,just have to wait and see what happens over there.

Thank you again Oliver. You are a gold mine of useful info.

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