When Is It The Right Time To Start Shopping For Another Gas Company ?

 

I have an Old Lease, due to expire in less than 7 months. The gas Company contacted me Dec of 2010, wanting to keep the existing lease enforce by offering an extension for an additional 3 years and a new bonus and royalty amount.

I met with a land man the  first of Feb, then the first of March I found out he is not my land man any more. I contacted the gas company myself, and no one has any idea who my land man is /will be. Here it is mid to end of April and still no more contact from the gas company. I feel like they have left me hanging in limbo. I would like to lease or sell the surface land but this is also hanging in limbo too due to not knowing how things are going to go with leasing the Mineral Rights.

 

So my question, Should I start shopping for another Gas Company ? If so when ? Do I have to wait out the less than 7 months until this lease expires or can/should I start shopping for another company now ?

 

Would appreciate any thoughts and help with this matter.

Sarah

 

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Permalink Reply by Sarah Violet on May 2, 2011 at 2:11pm

Thanks everyone for your thoughts, it really does help to hear from everyone.

 

VG, I do not have the ' right of first refusal' in my lease.

 

Janice, Months ago I tried to join a landowners group, I was told I had to wait until my lease expired to join. And now I'm being told to join a group you have to have 100 acres or more. Is there anyone out there who is willing to help those of us who have less than 100 acres?  Or is everyone in all areas of the gas industry just interested in reeling in the big fish?

Through my own research it is looking like my current lease will expire before the gas company gets back to me. Hopefully it will turn out to my benefit.Then with the help of a good oil and gas attorney, Go Marcellus Shale members and me plugging away I'll get a Good lease signed this time around.

Thanks everyone !!

Thank Goodness for this site !!!

Funny thing... All this money floating around out there. If I ever get my hands on any of it, I'll be donating to this site.

 

 

Permalink Reply by Angie on May 31, 2011 at 12:53pm

Anyone else told by the O&G companies that IF you expire you will NOT be re-leased and no other company will lease you because they hold leases on all surrounding properties?  That is what we are told will happen if we do not accept a top lease (extend the primary term), with no changes in royalty etc., only a bonus/acre that wont come for 120 days.  We have 85+ acres.  Would like to know what others have heard. Im wondering if that is really the case, or just another stong-arm tactic to get people to sign out of fear of being left out.

Permalink Reply by Ann Ticopa on May 31, 2011 at 3:13pm

Imo, the threat that they would never re-lease your property is bogus.  They might not agree to any better terms in a new lease.  But no way would they refuse to offer you one and drill around your property out of spite.  They really, really do want that gas.. 

 

Unfortunately, it is fact that SWEPI (Shell/East) has a lot of TC tied up.  But not everything ... and existing leases do expire.  As for another gasco being interested in leasing your land now, probably not.  But some years down the road when the price of gas goes up significantly, drilling a couple vertical wells on 85 acres will likely be a profitable venture.

 

One caution.  If you do decide to sign the top lease, don't spend the money before you get it.  They could instead decide to include part of your property in a unit declaration in order to hbp (hold by production) the current lease ... then surrender the top lease.   

Permalink Reply by Angie on June 1, 2011 at 2:13am
I agree it is bogus. Although they did threaten to drill up to our property and just stop, leaving us out...I dont buy it. We border state game lands on three sides of our property and they are not allowing surface disturbance.  They claim we are not big enough to set up a unit, but I would think someone would be interested in the access to the game lands eventually. We were told verbally that the money for top leasing would be paid "right now"  but the paperwork we received says 120 days. That would be after we expire. If we signed a top lease and they lock us in, we are still not getting any benefit. Why not wait for expiration?  I have a hard time believing they wont want us then....especially if they want this top lease so bad now.
Permalink Reply by Ann Ticopa on June 1, 2011 at 6:48am

The lease I was offered last year said 90 days in large, bold print.  But the "Default" paragraph of the lease said that if they didn't make a payment, they would have another 60 days - after I notified them in writing - before they would be in default. 

 

They had made me a serious offer only after I dldn't agree to let them do seismic testing on my land. Essentially,  by signing the lease, I would have been giving them a "free look".   They would have had five months to do the testing and decide if the land was worth leasing.  As it turned out, the seismic project was cancelled, they did make a subsequent offer, and I still haven't leased the land.  It's too soon to know whether I made a good or a bad decision. 

 

 

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