Replies to This Discussion

Permalink Reply by Whitt on May 4, 2010 at 7:00am

Atlas might be drilling on the adjacent property but it is probably a verticle well since that is all they really look to drill down here. They are just tying up as much acreage as they can because they have a lot of leases that are about to expire. I would look at both offers and see which company seems to have the equipment and the knowledge to get you the best well possible. It could be either company? I know that CHK has a rig in the area now and they are drilling a horizontal well.

Permalink Reply by Stephen Fox on May 4, 2010 at 7:55am

We signed with Atlas. Talked to a number of companies, had good legal representation with Smith Butz LLC located in Cannonsburg PA. Good terms, will start drilling in a short time, and have the ability to get gas to market now!!!

Permalink Reply by Stephen Fox on May 4, 2010 at 2:14pm

We are going horizontal!!!!!
Good luck
Fox

Permalink Reply by ellie johns on May 5, 2010 at 7:09am

Also, when Atlas isn't able to get terms they want (including changes from original leases), they sublease to another company to have a shallow well drilled to hold the acreage forever and you can't do diddly.

Permalink Reply by Whitt on May 11, 2010 at 7:12am

I find it interesting that you would say that these smaller companies are the ones to go with. You are speaking of having the royalties to be the most beneficial part of signing a lease. Many of these smaller outfits will drill a shallow well that they are hoping is cheap. They then will sit on the lease that is HBP and try to sell the lease to the big boys that are capable of reaching the Marcellus. I think the whole idea of getting a well is obviously important but you must look at the type of well you are going to get. Many of these smaller outfits will come drill a well that they have been capable of drilling for 50 years. They don't have the means to drill the wells that are very profitable for the land owners.

If you are looking to have a standard well that is about 4,000 ft and produces maybe a 1/6 of what a Marcellus well will and they won't have the capablities of a deeper well than I would take Robert's advice.

I don't know one company that is offering the state minimum at this point. There is entirely too much competition right now to even consider 12.5%. I think if you end up doing the research that you will realize that the bigger companies are the way to go. Obviously it is going to be a risk you are taking by which one you go with and if they will drill. The best advice is to research your neighbors and see who they might be leased with. It is a lot more likely that you will get a well if your neighbors are leased w the same company as you.

Permalink Reply by Nancy Famiola on May 18, 2010 at 5:50am

Whitt, small Marcellus players are still Marcellus players, only they are focused in specific areas. You are very lucky if you fall within some smaller company's development area. Not sure why you would ever think it would be a negative thing.

Other way of looking at this: Chesapeake will lease where they have no intentions of drilling. Small companies only lease where they know they will drill. So - if you're concerned about getting a Marcellus well drilled, your concerns should be with signing with one of the big guys, not the smaller ones.

If you are still concerned about this, an easy fix is to retain the shallow stuff while leasing the deep. Or, put in a drilling commitment for a Marcellus well.

Your thoughts on this really dont hold much ground, sorry.

Permalink Reply by Whitt on May 20, 2010 at 8:58am

I was only trying to emphasis that fact that most of these little players that are in the area don't have the means to drill a horizontal well that will get max production. As much as I would love to have a verticle well that is at a depth of 4,000 ft. I think I would prefer to have multiple horiz. wells that produce 10X's as much gas.

Permalink Reply by Nancy Famiola on May 20, 2010 at 11:42am

Can you give an example of this? These smaller companies also have smaller positions. Meaning they don't NEED an extraordinary amount of money in order to put multiple horizontals on all of their acreage. Pound for pound, these smaller guys are able to financially cover more of their acreage position with horizontals than the big guys can with their massive acreage positions. If it's financing, the smaller guys are actually more equipped to handle their acreage.

What you should be somewhat worried about is that in 2-3 years when these leases are about to expire, these big guys will have to run around to hold leases. That's when you might get a vertical well plopped down on your acreage after 5 years of waiting.

Permalink Reply by bryan garcia on September 1, 2010 at 9:38am

this is true

Permalink Reply by Oil and Gas nightmare on January 15, 2011 at 11:12am

for the record and I know this is an old blog.. I agree with you..we had a chance to go with one big company or 2 other small ones..we are going to go with the small one.. when you look at CHSKPs land holdings its like , I want to say 1 million acres over the entire marcellus, your chances of getting a well are as good as them throwing a dart and hitting you on that map..they just have too much to chose from.  its not that they are bad or evil (although I have read some pretty bad stuff about them) Its just if you are a company like Chesapeake you have so many options and can take as long as you want because you have all these 3-5 leases..there is simply not even enough drilling equipment around to drill all of their 640 acer units..mathematically its impossible..so thats why when I looked at what the small guys had, I looked at what they had versus what they are drilling or about to drill and it was almost everything they had...so to me, if you want the well for sure in the next 3 years..smaller guys are the way to go...ha did I just say size matters?..... thats what she said..... hahaha

Permalink Reply by Richard Evers on May 18, 2010 at 3:52am

Robert I talked to you a couple of weeks about going with a smaller company. It now occurs to me that the phone number you have for me was the scrambled number our firewall puts out. If you would call me @ 310 813-1673 I'd like to talk to you about leaseing our rights. Thanks

Permalink Reply by Nick Trolio on May 18, 2010 at 7:17am

Check out Rice Energy. They are a smaller company leasing in Greene County.

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