Replies to This Discussion

Permalink Reply by N Bohl on November 16, 2009 at 1:26pm

If the person who posted this had a lease would that make any difference?

Permalink Reply by Theodore Koncsol on November 17, 2009 at 8:20am

Ruby, what do you mean by the "orientation" ? If the well is bored, they tend to go upper left corner to lower right for the "arms"?

Permalink Reply by N Bohl on November 19, 2009 at 8:02am

In the post that states "If your parcel isn't leased, you won't receive any royalties." I am unsure about that - I guess what I pictured was a circle drawn around the initial site that would be roughly 640 acres. The circle might become more like an odd shaped oval going in the direction of the hydraulic fracturing. If, lets say, within that 640 acres you had 64 acres of land you would have the right to 10% of the royalties at the royalty rate that was agreed upon in your lease. If you had no lease the gas company would have to pay you the PA State minimum of whatever it is, 12 - 12.5%? (which is why I believe you rarely see rates below that) Is that called forced pooling? I thought that if you had unleased land a gas company would avoid it for fear of more complicated legal action if there was a problem. They like to have agreements in place for that reason whether or not they plan on ever setting up shop directly on a piece of land. I think it is why also if you have let's say 200 acres and you only want to lease 100 of it a company might not want to work with you. I have never heard of someone leasing half of their land and waiting on the rest to see what happens. I believe in NY one option a land owner has if they are not under lease and are in a pool is to pay for their % of the cost of the unit, which has to be documented by the gas company, and then they get 100% of their royalties. I wish PA had the same law because it gives the land owner more options and is also more possible leverage.

Permalink Reply by Lynn Wigglesworth on November 19, 2009 at 8:33am

Pennsylvania does not have forced pooling. The way I understand it, they can drill within (I think) 550 feet of your property line, but unless the well bore goes onto/under your property, they don't have to pay you royalties; any gas they suck out from under you is legally theirs, due to Rule of Capture...whoever can get the gas out owns it. I would think it's easier to just lease all the land in the unit to avoid future problems, but landmen in PA constantly threaten to "drill around you" if you won't sign.

Permalink Reply by N Bohl on November 19, 2009 at 9:17am

Thanks, I was just reading the OGC Law. It may be 330 feet but I cannot tell if that law is even relevant. As far as I can tell these laws date back to the 1970s.

Permalink Reply by Lynn Wigglesworth on November 19, 2009 at 9:32am

I think that's a problem; the laws are outdated and don't really protect property owners. We have to make sure any lease we sign protects us.

Permalink Reply by N Bohl on November 19, 2009 at 9:50am

It will be interesting to see how the laws change as activity increases. There are so many unknowns but I would think the larger the % of overall leased land there is the less likely it would be that laws would change. I would love to know what % of relevant land is already leased in Tioga County at this point, including State land. Would anyone hazard a guess? It's got to be at least 50%.

Permalink Reply by N Bohl on November 20, 2009 at 7:50am

Do you think it would be helpful to start a discussion that is just for posts regarding the ongoing changes with the relevant laws in PA?