Near as I can tell, right now we have 3 options;
1 &2) Join a group.
a) NWPA Landowners
b) CX energy.
3) Negotiate on your own.
To start this discussion, are there any other options out there?
Remember that there's a BIG difference in cost between a vertical well with a small frac zone at the bottom (total length well under a mile straight down) and a horizontal well with a mile of carefully guided horizontal and many frac zones. I've heard perhaps hundreds to one cost ratio, and there's lots of vertical drilling equipment sitting and rusting, so no capital required to start. They can effectively convert your short term "lease" to a full-on "sale" of your rights with this very small added (to the cost of your bonus) expense, and no added payments to you. Also, if they permit a huge horizontal unit, then HBP all of it with one well that maybe drains 10 to 20 acres, that's a very compelling financial proposition because it adds big proven reserves to their stock prospectus. Look at Atlas/Chevron in Crawford County over the last 10 years to see how this works.
well, there ARE a lot of shallow wells drilled which are 'not producing' but didn't think of it as a vehicle to hold the land for future gas/oil.
Claimed not enough gas... hummm, very real possibility because OBVIOUSLY the big gas/oil companies KNEW about these shale's before the ordinary landowner.
The problem with this "wear down" strategy is that America gave these folks a HUGE gift in Cheney's environmental exemptions. We gave with a realistic expectation that they'd work as hard as possible to develop the technology and infrastructure to provide America with cheap oil and gas, and lots of new jobs. When I hear "We've now acquired all the rights we need for the next generation, and are not interested in 40K acres of rich Crawford Co rights", even though I know it's maybe just a negotiating tactic, I fell like we've been victimized once again by typical American business management who'd rather make a quick buck speculating on land than actually do the hard work of building infrastructure that will meet their politically motivated marketing "promises".
Perhaps NWPALG, CX, et al, should try to start a partnership with someone who has a proven record of actually building infrastructure. How about a vertically integrated partnership with, for example, a big electric power company? I know that's more work for the management of landowner groups, too, but if we believe the geologists, the money's there. This would, after all, only be removing one more middleman, and it would be the one that's making most of the mess.
thanks berk,i was beginning to think i was hearing things.
its the end of the year, big business runs on a budget and around sept , oct. they stop spending until the next year . its economics. if the deal your lookin to take is available do you think thats the only game in town? i'd bet your considering signing with a flipper like guardian that is out offering low ball figures im not tellin you to wait im just sayin..............
I looked up flipper for a definition on this website some time back, and found that most people consider it to be a lease-buyer that does not intend to pay the leases without selling them, nor do they operate wells.
I do not like the connotation in your response that I am a numbskull if I take an offer from guardian, so I looked them up. I Found that they are a current Pennsylvania operator and have been, and drilled Marcellus wells in 2007 and 2008. Doesn't look like what they had was too successful, but they drilled. Looks like they also drilled a bunch of shallow wells as well, at least into the same formations that EOG and PGE were drilling in the same area.
I would rather sign with a known operator, that has already paid some people near me, than with someone who, when I looked them up, found they are not an operator in PA, or in their home state of TX.
I have seen the Range offers, and since I know they are already holding lots of acreage with Medina wells that produce very little royalty, I would want certain protections in the lease. Guardian is willing to give those protections, Range is not. The other names I mentioned also have the same protections in their leases, except Range, but those others are withdrawing offers. The land groups I know of have not had any success here in Crawford, and limited success in Venango and Mercer.
Sometimes the first in gets the goody, we shall see - don't know if I am too late to get something. I made a bet to wait, and it may have cost me.
The cost and risk to us landowners is only a little what we did/do last year, this year, or next. The big risk to unleased landowners is the huge critical mass of old leases and HBP acres. The drillers can fully load their drills and crews with land they already hold, and starve us unleased folks out by waiting. If you doubt this, study the history of the Bakken - currently the richest boom area in the US. Most landowners there are NOT benefitting from the boom because they long since got hungry enough to take some lowball offer for a junk lease (actually a fire sale of mineral rights for a small lease bonus and the cost of a cheap vertical well). This little economic/market detail seldom shows up in press releases on the Bakken, but I challenge anyone reading this to provide data or evidence to refute it.
Bob; could you give some details on the Bakken history? From what I understand, the Bakken is a very old oil field that was considered played out, not much oil left. But new horizontal drilling has releases huge amounts of oil that were previously thought to be unrecoverable. If so, that means most of the land was leased decades ago and was still HBPd by old leases.
i know guardian is doing business for halcon so if you sign i wish you the best. we landowners deserve to make some money for what we own. and if your refering to me as calling you a numbskull that was no way shape or form intended. good day.
If you are a "numskull" then an lot of us are also numskulls - all trying to learn. One thing that is apparent is that one of these drill pads [with several wells] into the Utica, Marcellus etc. probably cost the producer in excess of $20,000,000. It takes the billion dollar companies to throw that kind of money around. Not infrequently, in an effort to sell its existing holdings, a smaller local producer will drill a few deep holes to "prove up" the reserves. Often these are vertical holes that are sufficient to give the geologists sufficient information to determine what is there [but far less expensive than horizontal drilling and fracking]. With "conventional" drilling it was not necessary to lease every piece of land since the product flowed to the well bore from long distances. To make the package more attractive for sale to the big guys, these smaller companies will do a little leasing to try to fill in blanks as required for the shale operation. Once the package is put together they will sell it to a billions dollar company for probably $5,000/acre and a 20% royalty and keep the difference between what you are paid and that company is paid as an override royalty.
Range [as well as maybe some others] is already there and you will be dealing with Range or someone picking up leases for Range [or whoever else is already there].
Reply to Craig's post on Oct.15th
A recent posting on this web page indicated that NWPALG stated at a recent meeting that energy companies had no interest in all of our acreage. We feel it is important to post this clarification in order to set the record straight.
Our statement was that as of August 2012 the general response from energy companies was that none were interested in all the acreage represented in our five county area at this time. However, we are told that may change in the future. It was further indicated that several companies are currently interested in pursuing leasing of portions of the total area. To be more responsive to these indications of interest, the NWPALG is holding regional meetings, generally consistent with geographical difference within our membership area. This also benefits the members, since the group has grown too large to hold meetings at any local venue.