Replies to This Discussion

Permalink Reply by grayhairedgrandpa on September 12, 2010 at 2:17am

Think of a gathering line as a tributary going into a river.

Permalink Reply by sharon baatz on September 12, 2010 at 9:37am

Thanks, Do you live in the Bradford area? i guess you got your name because you are a Grandfather.
Sharon

Permalink Reply by grayhairedgrandpa on September 12, 2010 at 2:10pm

I live in the Bradford County and have 5 grandchildren. My 6-year old grand daughter gave me the nickname. Actually, I have an amazingly resemblance to my avatar.

Permalink Reply by sharon baatz on September 12, 2010 at 2:25pm

Where in Bradford do you live? Have you always lived there?
Sharon

Permalink Reply by daniel cohen on December 3, 2010 at 12:29pm

Dear Shalers,
A question out of ignorance. After one has signed a lease, and the production unit has been defined and a well pad established,usually the company sinks a vertical shaft. If you are part of the unit, with an expected horizontal shaft to be established into your property. if the O & G Co. DOESN'T get around to drilling the horizontal for the initial leasing period, are they required to renegotiate the lease? Or is the fact that they sank a vertical (although not on your property) sufficient for them to claim that they have an ongoing production site and therefore DO NOT NEED to renegotiate?
Thanks,
Dan

Permalink Reply by Tom on December 7, 2010 at 11:03am

I think it depends on your lease. My lease was based on recording the production unit. There were other items in the lease regarding no "shut-in" wells. So in my case once the well was drilled and the production unit was recorded then I was locked in for the production life of the well. I think they would need to do a horizontal well in order to establish a normal production unit of 640 acres (+-) I think a vertical well would give them much smaller acreage. The question is whether they are required to bring the gas to market or whether they can say we do not have the pipeline therefore we cannot. It seems that the companies have over-leased and are trying to do as many horizontals as possible to lock as much up as possible. The problem they have caused themselves is they have created so much NG reserve that they have driven the price to a level where it is marginal to drill.

Permalink Reply by daniel cohen on December 17, 2010 at 5:03am

Thank you Matt-you speak with certainty. May I ask how you know?

Dan

Permalink Reply by FXEF on December 18, 2010 at 1:01pm

When your land tract is pooled into a production unit, you will receive royalty from all wells drilled in that unit. The wellbore does not need to go under your land for you to receive royalty from a well in your unit.

Permalink Reply by CJK on December 19, 2010 at 12:15pm

The gas companies can hold your lease in a pooling unit, if your lease provides for it, for either an indefinite or defined term (in your lease). After a time, generally a year the companies have to pay you a shut-in royalty. In my case the lease calls for a $5 an acre shut-in royalty with a two year allowable period. But then they can send the gas to market for a day and shut it off again for two years.  As you have seen on this site in the Chesapeake Dec 2010 investor presentation there will be a switch to oil until gas prices rise. I believe companies will be drilling and securing their leases and it will be awhile before much of the NE gas goes to market. The infrastructure is not there and the demand is not there either.

Permalink Reply by daniel delima on December 16, 2010 at 5:28pm

Has anyone recived a check from royalties? I heard of two different people with two acres, one is getting $75.00 a month the other $750.00

 

Permalink Reply by CJK on December 19, 2010 at 12:04pm

Royalty checks can vary company to company. Lease to lease. Different things are allowed to be deducted from your royalty check in the way of post production costs. Different companies deduct different things, in most cases there is no way to verify the deductions and the company may not have any obligation to tell you what they have deducted. Some are better than others. I have done some rough figuring of comparable acerage in comparable units, yielding comparable volume of gas and one parcel paid $400 while the other paid $4,000 per month. Of course this was with different companies. The problem remains that most of the time the burden of proof lies on the landowner to dispute the amounts paid and generally it requires an audit of the gas company which is a costly proposition for an landowner. When you compare royalty checks you have to make sure you are comparing equal percentages of the units and equivalent volumes of gas. It isn't to easy to do but it can be done.

Permalink Reply by marilyn ascani on November 12, 2012 at 4:45am

Any one have a figure per acre, per month on an average producing well at today's prices?

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