Offers for a Drilling Pad and Frac Pond

Chesapeake contacted me about a well pad on my property does anyone have any answers to a couple questions. 1. They mentioned an offer for placing a pad on 4 acres. Is this just for crop damage or is it for more and what is normal?   2. They also mentioned possable offer for water pit for fracting water. What should we expect?

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Replies to This Discussion

Permalink Reply by Stark County Land Owner on September 21, 2011 at 2:28pm
Steve, where in Stark are you? First off the agreement for a well pad and for the water pit should be a totally separate agreement from a  gas and oil lease.  The agreement should state what they'll do as far as compensating you for crop damage, the loss of your land and ability to plant crops on it, and exactly what they will and won't do as far as restoring and repairing the property after the wells and pad are in and in production. Same as for the water pit. Each should be a separate payment. You need a good gas and oil attorney to work with you. Contact the bar association in Canton and get a referral for one.
Permalink Reply by steve keller on September 21, 2011 at 2:38pm
Kevin, we signed aprox. 1 year ago we had legal help then do we need them again ? chesapeak informed us that these would be separate agreements lexington twp  thanks!
Permalink Reply by Stark County Land Owner on September 21, 2011 at 2:42pm
I would say yes but I'm not an attorney, just another land owner.
Permalink Reply by steve keller on September 21, 2011 at 2:52pm
they mentioned 6 wells from this pad is this normal, how long till there all drilled?
Permalink Reply by Stark County Land Owner on September 22, 2011 at 12:08am
Steve, yes 6 is normal. Hope your lease was for royalties from each well. If you don't like your terms of the lease you could be in a position to renegotiate the whole deal. You should have at least received $2,900 an acre and 17%.  They want your land so play hardball with them, seek the advice of a good attorney.
Permalink Reply by steve keller on September 22, 2011 at 12:45am
we signed a year ago with a small group  we got less than 2,000.00 per acre .but more than 17%. so far we are ok with lease and terms .we just need lots of answers
Permalink Reply by Mike Zimmerman on September 21, 2011 at 2:34pm
The fee is sometimes known as a spud fee. It is for much more than just crop damage. There will be truck traffic like never before seen in these parts :)  Do some research on drilling and fracing look for pictures of well sites and imagine it happening on your property. I am not against drilling but want you to be aware of all the inconveniences that could go with it. I am assuming you have an old lease because that is usually covered in a deep well lease. Mine has a $30,000.00 spud fee. Good luck! About where are you located? I live in Paris Twp. and am eagerly awaiting some activity here. :)
Permalink Reply by Mike Zimmerman on September 21, 2011 at 3:19pm
Steve, It is my opinion that with all the land they have to tie up that they will probably drill one well to HBP or hold by production, then move on and come back later and drill more wells. Did they say how big unit is?
Permalink Reply by steve keller on September 21, 2011 at 3:26pm
no agent just said they needed to commence operations to hold someones lease that is about to expire.we are wondering if they install pad does that hold leases without drilling
Permalink Reply by Mickgyver on September 21, 2011 at 7:21pm

It sounds like one of your close neighbors might get a chance at some of the better money offered for acres now if they don't get something started before the old lease expires . Also I heard some pits are worth $10,000 per . The companies are all trying to get some drilling in now to hold some of the leases that were paid real cheap before this rush came on . 6 years ago it was $5 an acre . Now it is listed in places valued at 5000 an up since Utica is compared to both the Eagleford and the Bakken in production . One place says Eagleford average is $20,000 per acre and Bakken also up high .Make sure to check for the current going rates for your needs and get a solid agreement on all details you want .Good luck

Permalink Reply by Anthony(tony) Tavelli on September 22, 2011 at 10:12am

  Steve,your lease, somewhere says what amount of activity on you will hold it. Spent some time in Bradford Co. with a man who wrote  checks for pads and ponds,as I recall it was $500 per acre per year,5 year period.Not Chesapeak. Leases there were writen,$100,000.00 per well for a pad. As it was explained. The leases were writen for the Trenton formation,which would only require one well per pad. They followed the contract. Marcellus was 8 wells per pad.Easy math. Maybe gives you some idea of the value or money potential.

Permalink Reply by Anne-Marie Anderson on September 22, 2011 at 4:27pm

Usually the drilling bit must start drilling for leases to be held.  Placing a pad would not hold a lease.  You should ask for more $ since it will save them from releasing others.

 

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