Replies to This Discussion

Permalink Reply by 015334grltd9m on April 22, 2014 at 12:38pm

I like your Spunk especially from the home of Clark Gable.  PM me and we can talk. 

 

Thanks,

Ron

Permalink Reply by Thomas Malcolm Pendergast on April 27, 2014 at 11:09am

This has been really very interesting.  For one thing, I looked at Consol's presentation and their plans for drilling under the entirety (and beyond) of Pittsburgh International Airport just blew me away!

From just 6 pads they've got 49 laterals!  And people going to and from the airport won't see any evidence of any drilling activity.  Consol is such a class act!

Remember that Consol took over AEP's Egypt Valley operations, completely restored it and it is now "The Wilds", one of Ohio's premiere tourist destinations.  West Virginia also recently commended the company for reforestation contributions in the state.

Teri Ohio, I love your commentary and observations.  I've learned so much about some aspects of life I hadn't really considered before.  Like two-hour commutes per day to go to Cadiz????  Unbelievable!  Now, let me tell you something:  the Belmont school district recently received about $6,000,000 for a signing bonus for leases from, I think (I could be wrong), Antero.  They used some of that money to replace their school buses (I hope they run on natural gas!) instead of hiring new teachers (worried about declining population but the royalty stream should manage that nicely).  

Seems to me like people in the boonies use a lot more common sense than sophisticated places like Granville where I'm from.

A local driller here was having success in land adjacent to Granville Intermediate and twice asked the board of education for permission to do a seismic survey on school property to verify his suspicion that the school does indeed sit on top of an exploitable and income-producing resource.  Well, I've looked at his maps which show the drainage areas two of his existing wells produce from and even though I'm no petroleum geologist or engineer, I don't need a seismic survey to tell me that the school sits right on top of a valuable hydrocarbon resource.

Yet, at the last board meeting where the issue was "deliberated" a prominent member of the community expressed opposition to seismic testing because it would contribute to global warming.  No challenges to that assertion.  And the president of the board said "If you're not going to pull the trigger, why buy a gun?"  That seemed to have settled it.

Tomorrow, I'm meeting with two of the board members who voted for the seismic survey. Together, we'll look at the driller's maps which show the drainage areas from two operating wells that overlap school property.  At some point, I'll tell them that that's money that's being drained out from under them because of the Rule of Capture.

The Rule (or Law) of Capture allows, for example, a hunter to retrieve a deer slain on one property to retrieve the carcass from another property the deer collapsed on with no obligation to pay the second property owner any compensation.  The same legal principal applies to hydrocarbon resources.

On the other hand, the school could still sign a lease agreement with the driller for an up-front signing fee plus future royalty payments and avoid the need for future school levies (which is on the ballot for the next election and which I don't mind telling voters to turn down).  Of course, with directional drilling, there's no need to put "ugly" drilling pads on the school property surface itself.

At some point, tomorrow if the opportunity presents itself, I'll tell the current school board that the previous board members failed to exercise due diligence and breached their fiduciary responsibility to the taxpayers by failing to capture a revenue stream and avoid the need to go to the ballot for more school levies.

I'd also remind them of the benefits that schools in the Los Angeles and Beverly Hills oil and gas basins have been enjoying for the past 40 years.  Beverly Hills High School and Crestview Country Club have rigs right on their properties that access oil and gas from under some of the most high-priced real estate in the nation.  You'd never notice it in passing thru Beverly Hills and Brentwood but you sure would if you were a property-owner there!

Finally (!) to Ron Eiselstein:  if indeed you are involved with aquaculture, be sure to check out Origin Oil.  They are involved not only with aquaculture but also with remediating/recycling flowback/produced water from fracing operations.  Very exciting stuff.

Permalink Reply by Teri OHIO on April 28, 2014 at 10:22am

Thank you to Thomas Malcolm Pendergast,

I have enjoyed reading your above comments.  You have a wide base of experience in various geographical areas and are positively involved in local / community needs.  When we lived in Harrison County we drove through Egypt Valley to get to our Quaker Meeting in Barnesville.  Glad to hear the oil companies restored it.  I plan to be back in the area for a week or so this summer when my teenager completes a month of music training in Ohio.  I will drive the same road in Egypt Valley and enjoy the scenery on my way to her recitals.  

I am leaving in a minute to pick up a birthday cake but wanted to let you know I appreciated all that you wrote about... and will comment further on another day.  

Today (April 28, 2014) we received in the mail the Division letter and forms from Gulfport that they want us to sign. I think there are a few mistakes like the number of acres they wrote down.  What is interesting is we got two of the same letter.  One addressed to my husband and me and the other one addressed just to my husband.  I wonder if their computer has us listed twice but with a different configuration of ownership in each letter.  

Questions:

I am wondering if at this point in time if there can be any changes regarding our royalty interest rate?  

Also: Can you explain to me what a Division Letter's purpose is? I think it is basically for us to give them our soc. sec. #s and our bank routing info.  Am I correct?  

I will have to check over it due to the mistakes I think they made regarding two letters arriving and the number of acres than what we are listed on the Plat list and our lease.

I wish we had waited to sign a lease after consulting with an attorney because we only have 1/8 or 12.5% royalty interest.  If everyone in our plat got this then I guess it is what is.  But I would be curious to know if our neighbors got a higher %.  Since we live quite far it is difficult to know.  We do not have a lot of land so any thing higher would perhaps make all this worth the effort.  Too bad most the farm was sold 14 years ago.

Any thoughts for us regarding the Division Letter that we just received?  Is it too late to do anything else than what we have already agreed to?  

Thanks for any thoughts on this.  Sincerely, Teri     

Permalink Reply by Kangoo on April 25, 2014 at 11:38am

Teri,

Today the ODNR released production numbers for Q4 2013. The first of the Milliken wells was on production for 75 days in Q4 and produced 19,309 bbls of oil/condensate and 136,220 MCF of gas.

                                                                                                                                                                           

Permalink Reply by Teri OHIO on April 27, 2014 at 5:30am

Kangoo,  

I am glad to have joined this site. It looks like we can inform one another about the oil and gas industry and if we ever need one another's voices in future matters... one voice multiplied by many others becomes stronger.  At least I would like to think this about living in the good ole' US of A.  Again thanks.

The company leasing our land has not informed us so on Monday I will have to figure out who I should be in touch with. We had to have a document notarized not long ago that has something to do with our ownership.  Or, do we just wait? 

QUESTION:  Why does one company like Chesapeake do the paperwork when we've been told the wells are Gulfport wells and been told by Chesapeake that Gulfport is the company that will be paying us?  (I guess I am curious to why someone from Gulfport hasn't had a person in contact with us like the young woman at Chesapeake.)  Do all the companies get a cut before the landowner's percentages are worked out?  Why so many different companies involved with the Landowners?  It goes to figure that the company preparing the land... going onto our property for roads and pipes etc would be different if the oil and gas companies contract out these types of jobs, but why would Chesapeake be the one helping us get all our paperwork figured out (the local office in Harrison County didn't have an important paper and so this problem had to be solved and we appreciate the help of nearby neighbors to our land and the woman at Chesapeake) ...Why? --when the wells belong to Gulfport?  

We do not mind working with the young woman at Chesapeake for she has been extremely friendly and helpful... however she couldn't answer specific production information or perhaps the links to ODNR were not yet showing production numbers. The site didn't seem to work correctly a month or so ago.  I am a newbie to all this so I am beginning to understand that ODNR release productions status on a quarterly basis.  But isn't there a way to follow the actual oil and gas companies? directly?  I suppose we should be hearing something from Gulfport soon.

QUESTION: Do you or anyone else have any warnings or advice to give us at this point in the "play"...  I am smiling wondering if I am using the word correctly.  We have yet to receive our first royalty check.  The checks before had to do with the leasing and preparing the surface.  

We keep receiving offers in the mail regarding individuals and companies wanting to buy or lease our mineral rights and we shred these offers.  Wish they would stop.  I hate junk mail.  This land is my husband's former home and someday we may return to live there.  Thanks for the help everyone. ~~Teri 

Permalink Reply by Philip Brutz on April 27, 2014 at 5:43am

You may want to read this blog before you sign a division order: http://gomarcellusshale.com/profiles/blogs/mineral-management-shale...

Permalink Reply by Teri OHIO on April 27, 2014 at 6:07am

Thank you.  Would you know at this point in the process if we have most likely already signed a division order?  We leased the land to the oil and gas company for a certain amount of time and got a check back in 2011 and the contract states we will receive a certain % if the wells produced.  Our neighbors fourteen years ago purchased most of our farm and so this family helped us work out a mineral rights question with an attorney who helped us both.  Both families should be getting from the oil and gas company a remaining percentage of lease money that was held back and that should go to them and us.  My husband has owned the land and mineral rights (and now me) since 1975.

I think it was back in 2010 but certainly by 2011 all our neighbors in our home area were meeting to talk about the contact they'd had with the oil and gas companies and since they have more land than us we just went with the flow. My husband trusts his neighbors whom we both appreciate greatly and since we are out-of-state we deferred to them.  But we haven't had much contact with old neighbors since that initial contact back in 2010 or 2011... everyone is busy.  My husband works such long hours at his job here and so I am the one attempting to figure all this out.  One thing we both miss about our community back in Ohio is how people help one another out.

Permalink Reply by Philip Brutz on April 27, 2014 at 12:54pm

Are you part of a drilling unit?

Permalink Reply by Teri OHIO on April 27, 2014 at 2:20pm

Phillip, yes my husband and I have 12.626 acres (1.521%) in a drilling unit Plat of 830.103 Acres in with the Milliken wells. Know that this is not a great amount, but we still are interested in learning from those of you who are knowledgeable and living locally in Harrison County.  We also are encouraged by the increased employment and the boom to the economy.  Even the local colleges are training young people for the oil and gas jobs.  This is most the likely the biggest blessing of this industry.  Wish we had more than 1/8 or 12.5% royalty lease.  Suppose there is no way at this point in time to have a larger percentage.  Some on the site are talking lately of being offered 20% royalties.  

The company when we first signed held back 1/16 due to a paperwork problem in Harrison County offices that was resolved and now we expect the rest of the up front money to be forthcoming and wish somehow we could have been more savvy when we did our original lease after hearing of the higher interest royalties.  Would you have any thoughts on this?

Permalink Reply by Philip Brutz on April 28, 2014 at 12:21am

Have you received royalties yet?

Permalink Reply by Thomas Malcolm Pendergast on April 28, 2014 at 2:51pm

Dear Teri Ohio,

How is thee?

Somehow I missed thy reply to me.  I've just returned from the Granville School Board meeting where I discussed their hydrocarbon exploitation opportunities (or in their case a lost opportunity since the school sits above a productive hydrocarbon resource that will be drained out from under them into two nearby wells because they didn't enter into an agreement with the driller. They could still do so but I know they won't.  Due their obstinensy, I won't be voting for the school levy on May 5th!).

I recommended that the Board consult with Matt Warnock at Bricker and Eckler law firm (that's Senator/Governor Bricker's firm).  His email is mwarnock@bricker.com.  I recommend that thee contact him too.  He'll know the answers to most of thy questions e.g. the one about the "Division Letter".  I have no idea what that is.

But I was most thrilled to hear thee mention thy drives to the Quaker Meeting House in Barnesville.  I went to school there!!!

As for thy royalties, I don't think you'll be able to renegotiate them but check with Matt on that.

I'd like to point out that I have a very high regard for both Chesapeake and Gulfport.  I do hear some complaints about Chesapeake regarding deductions from royalty payments but that seems to be wending its way through the Pennsylvania courts.  I've never heard complaints about Gulfport.

In fact, Gulfport is so keen on the Utica/Pt. Pleasant formation that they sold all of their assets in the vaunted Eagle Ford to concentrate their investment in Ohio.  Their president, with 30 years of experience in the business, said he has never seen anything so big.  Another president, of Williams Companies, with 40 years experience said the same thing.

But the most spectacular news comes from Antero.  They just closed on a deal with the Muskingum Watershed Conservation district for $15,000/acre and 20% royalty, the highest payout yet.

The potential is huge.

Best regards,

Tom

Permalink Reply by Teri OHIO on April 29, 2014 at 10:25am

Tom, my daughter attends the Friends Music Camp at the Friends School during the summer.  I miss the fellowship with the Stillwater Meeting.  Thanks for the encouraging news about Chesapeake and especially about Gulfport.

Teri

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