Replies to This Discussion

Permalink Reply by paleface on January 13, 2015 at 4:17am

 Thank You for your reply,Sabinsville is right in the heart of the Utica sweet spot. Sabinsville storage field 6490 acres.

Permalink Reply by Janice L. Hancharick on January 13, 2015 at 6:42am

You're correct Jack in indicating it IS the geology that determines who gets to profit from future royalties even though a storage lease is also involved.  Several members of 4-County  holding storage leases requested and received written permission to join the Group with the intention of entering a lease agreement when the time came.  This bodes well for them exactly as your last paragraph indicates.  I've seen several of the old storage leases and according the old timey  wording the acreage is reserved down to and including the Marcellus layer.  That leaves the Utica and below wide open for development ... a depth we always knew would be the cash cow for this region.

Anyone getting a pittance for storage lease acreage should get out the old paperwork and scrutinize EXACTLY what it says.

Permalink Reply by Jack Young on January 13, 2015 at 7:15am

Typically storage fields in areas where there was shallow production at the time the field was developed will have some storage leases that are restricted to the Oriskany (the main storage reservoir in our area). If a person has a lease like that, they're in good shape as regards the Utica. I would have to say that I've seen those leases more commonly in the Sharon, Hebron and Ellisburg Fields, and not so often in Sabinsville. I've never seen an old lease that mentioned the Marcellus specifically, as it wasn't on anyone's radar back then. The storage operators will fight any attempts to drill the Marcellus near their Oriskany storage fields, but the Utica won't be an issue if they don't own it or have it under lease.

Permalink Reply by Jack Young on January 13, 2015 at 5:24am

Because of the shape of Sabinsville and the rule that lets storage operators hold adjacent acreage (within a liberal buffer zone) as well, Dominion is offering 15,600 acres there. So it's a massive block of acreage, and should be quite solid. This is a very attractive drilling prospect.

Permalink Reply by Steven R. Rothenberger on January 13, 2015 at 9:39am

Jack,

Can you explain to me how Dominion can hold adjacent acreage without a lease in place?

If i understand you correctly if i have 100 acres unleased and my neighbor has his 100 acres leased for storage your saying that i can't lease because i am in a buffer zone?

Thanks,

Realtor Joe

Permalink Reply by Jack Young on January 13, 2015 at 10:41am

If you have a storage lease with Dominion and any part of it sticks into the buffer zone, they can hold it for an indefinite period of time under that lease. And they can hold even the parts outside the buffer zone if they're included in the same lease. My point is that it's not just acreage inside the actual storage field that can be held by a storage lease. That's why Dominion has so much more acreage available there than the size of the storage field itself.

If your property is in a storage field buffer zone and isn't held by a storage lease, you can certainly lease to others. If they try to drill a Marcellus well there, the storage operator might be able to stop them (the buffer zones do come with certain governmental protections). But your lessee could definitely drill and complete a Utica well.

Permalink Reply by Steven R. Rothenberger on January 13, 2015 at 11:15am

Jack,

Thanks for the reply.  How far or how much of a buffer zone are they granted?

The reason i ask is that i recently had a group inquire about my ground and then said it may be in the buffer zone of the storage area and that they probably could not drill.

I am not in a storage lease and neither is my neighbors but it may be as close and 1/2 mile away.  I seems to me to be unfair for them to be able to affect my ability to lease and not get any just compensation from them "taking" my rights.

Permalink Reply by Jack Young on January 13, 2015 at 11:48am

There are multiple (and different sized) buffer zones allowed by the various state and federal agencies that regulate such things. And the storage operator often designates something larger in their internal records. I've seen 2000', 3000' and 4000' buffers used in Pennsylvania. And while a small bit of a leased property inside the buffer can let a company hold the acreage outside, there's nothing the operator can do about unleased acreage outside the buffer. I would ask the storage operator first, as making a formal data request to any of the regulators takes time. Which storage field are you near?

Permalink Reply by Steven R. Rothenberger on January 14, 2015 at 10:22am

I don't know the name of it but i am trying to get it it is in Harrison Twp. just off of the North Fork Rd, and McCutcheon Hill Rd. 

Thank you

Permalink Reply by Jack Young on January 14, 2015 at 2:43pm

That's the Harrison Gas Storage Field. I've got good maps of the field before it got converted to storage, and a poor quality map done afterwards that shows that intersection. It's right in the storage area itself, but if you can give me a tax parcel or distance & bearing from the intersection, I can tell you what the old map says about your particular parcel.

Permalink Reply by Steven R. Rothenberger on January 15, 2015 at 5:28am

Thanks Jack for you help!

Is there a way for you to share the maps with me?

my parcel #s are: 110-005-061 & 110-005-062-2

Permalink Reply by Jack Young on January 15, 2015 at 9:15am

The map I have with the storage field on it just misses your tracts because the buffer zone on that end of the map was cut off. Both tracts appear to be roughly 3,000' from the edge of the field itself, so if you aren't under lease to the storage operator, your property is leasable and drillable unless the field boundaries and buffer zone have been changed since the time of my map, which is always possible.

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