Replies to This Discussion

Permalink Reply by Jim Lawrence on October 5, 2012 at 8:39am

That's the one Hunter.  Seems their are several and many miscommunications due to all the different players from the old bhp leases from the 50s up to the new leases.

Permalink Reply by Tim Tarr on September 19, 2012 at 3:00am

If your current Royalties are below 18% ask for at least 18%. I would also ask for $ for lawyer fees to review changes.

Permalink Reply by Kathleen on September 19, 2012 at 4:21am

Please read all you can on chesapeake. Yes at this time they may be drilling more than one well per pad but don't hold your breath this will continue.
As far as I can tell they will not give any consideration to the mineral owner for opening the lease to make these changes either.
They could just drill two wells on a pad to cover the 1280 instead of asking for this. IMO in time this lease change will be used to HBP.
I do believe ONE DAY they will drill the whole 1280 but the math says they can't right now, do to the amount of leases they they signed in our areas.
The only chance they have at getting everyone they need in before the leases expire is to get the unit sizes bigger in the leases.
When they win this halves their costs but could potentially halve your royalities until they drill all 1280 with more than just one or two wells. This could be a thing your signing for your grandchildren now. I feel they learned a lesson about putting too much product with NG so why do it again is another way of looking at this. Plus NGL prices have dropped.
Please read other plays and see what exactly is said from people whom been in business with CHK for years. The eagle ford, the haynesville, etc.. Please read up on CHK.
I was asked this and pleaded with by DPS penn to make this change and I looked around, called our attorney, asked for minor considerations (CHK said no to all) and decided to let my lease stay as written. After I said no I was still placed in a unit.

Permalink Reply by Teri on September 21, 2012 at 12:49pm

This is good information, Kathleen.  I can state from personal experience that ANY modification can be laced with very beneficial wording for the G&O company and slashing benefits in the land owner's original lease.  Watch them like a hawk.  Their word can NOT be trusted.  Also, no matter what you are told, there is absolutely NO guarantee of drilling any more than one lateral that has been placed to hold a unit by production.  The more land they can lock up, the more valuable their large land packages are to flip once more.  Who wants to waste time and money drilling when there is real money to be made flipping.

Permalink Reply by Jim Lawrence on October 5, 2012 at 8:45am

I agree Kathleen.  If you signed a lease and received a bonus then chesapeake will probably drill 1-2 to hold the land.  For others that are hbp from vertical wells they are going to be held for a long time.  Those wells won't get drilled till the newly leased get drilled first or sold off.  Anyone hear of a lawsuit by the employees of chesapeake against the company?

Permalink Reply by Nizhoni on September 19, 2012 at 12:56pm

Here are two links to very interesting articles that happen to be both written by Attorney Alan Wenger.  There are so many things to consider when approached to change a lease.  Make sure you have all the facts, and do a little research.  This has been a topic on GMS many times so read through some of the old discussions.....

http://the-daily-digger.blogspot.com/2012/06/more-warnings-for-land...

http://www.vindy.com/news/2011/dec/28/oil-and-gas-leases-learn-how-...

Permalink Reply by Larry Moore on September 19, 2012 at 11:33pm

Wow, you guys have some truly awesome advice.  Nizhoni, those articles were real eye-openers!

Has ANYONE else in GMC refused the 1280 amendment and been included in a unit anyway?

If there even only one or two of us that have been successful at declining the amendments and then been included in an unit, it would provide a huge bargaining chip.

Permalink Reply by Teri on September 21, 2012 at 1:20pm

Yes, personally and 2 neighbors.  I have been told by company officials that they need to "educate the state" on the importance of the 1280 acre units.  I believe they are banking on making changes at the state level to allow larger units without land owner permission.

Permalink Reply by Nizhoni on September 24, 2012 at 10:59am

Larry, I personally think it is to early in the game for us in Ohio to really see if our decision will include us in a unit or not.  I think the reason they come to you in the first place to make the change, is because they are still trying to put the maps together.  Our property is in Stark.  We are basically at a dead standstill here.  They approached my neighbor in May about amending.  The landman said he was coming over to my door next...?  He must have gotten lost!! :) Here it is Sept. and he still hasn't knocked.  I have read over some of the pending lawsuits going on in Carroll county and surrounding counties, and many included the intimidation and mentions of CHK tactics of the threats when wanting an amendment to the 1280.  I think they don't like negative publicity, so maybe that accounts for the hush that has fallen over our area!!  Time will tell.  My thoughts, and only my thoughts, is that time is on our side.  The more wells that go in, the more numbers we will see, and a chance to make a better informed decision...

Permalink Reply by patrick on September 23, 2012 at 1:42pm

My property is in Harrison county. I also have been appproached about increasing the pool.

My understanding from the rep was that they would expand the size to about 1000 acres.

He stated that the well  could then have laterals of 7000 ft with a seperation between lines of 1000ft.

T

Permalink Reply by 0ym9x5ag7ury2 on September 23, 2012 at 3:21pm

Patrick,  As suggested by several people above, always have an attorney review any document before you sign. The change of unit size contract handed out in our neighborhood turned out to have additional changes that the Rep didn't mention (I wonder why?) and it was recommended not to sign the document.

As always, know what you are signing. No one will knock on your door to try and improve your position or situation, but I can guarantee that it will improve their's.  "Money Brings Out the Worst In People".

Permalink Reply by patrick on September 24, 2012 at 1:44am

You can rest assured that an oil and gas attorney will be looking at it.

 

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