Seismic testing (again)

Shell reps has just come through to get permission for seismic testing. I'm not leased (total surprise to them...I guess landowners aren't the only ones kept in the dark!), so I said no. I said I would be interested in leasing, and they said Shell would get back to me soon.

Does anyone know Shell's current standard offer? The last I heard (late last year) it was $2000/acre, 15% royalty. And they have addendums for C&G rollbacks, no storage, and some other environmental ones. I want to be prepared when they call to get the best deal. I'd like to hold out for a higher royalty; I know that Shell has bought/taken over leases with royalties as high as 20%. As I've written before, I'm in a pretty good position where it would be difficult for Shell to totally ignore my property. I want a deal, but I want better than their standard offer: now is my chance. Any ideas?

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Replies to This Discussion

Permalink Reply by Wayne D on June 21, 2011 at 3:01pm

Hey Lynn, Had a shell fellow stop by today and wanted to map out property for seismic testing . My area was already tested about a year ago . Last time I gave permission for walk in only. sensors only , no mulching or drilling blast holes . I am happy I added expires in 90 days or they would be waving the previous permission slip as they made them selves at home. I told the young fellow ( I think my dog is older then him) to send the land man to talk lease with reasonable addendum . I am in Delmar Twp, what twp are you in?

Permalink Reply by Lynn Wigglesworth on June 21, 2011 at 3:08pm
I'm also in Delmar Twp. They really pushed for me to sign the permission to do the 3D seismic. If they want to talk reasonable lease, I'll talk about giving permission.
Permalink Reply by Geo on June 21, 2011 at 5:35pm
Shell contacted me about 2 weeks ago about doing seismic testing in Lawrence Twp..I am also unleased. East offered $2K acre and 15% about a year ago..So i'm curious on how you make out.
Permalink Reply by Lynn Wigglesworth on June 22, 2011 at 2:05am

Did they talk to you about leasing? I haven't heard of any new lease offers from Shell since last year. I wonder if they've raised it any? I'm going to see if they will go for a higher royalty with lower bonus.

Permalink Reply by Wayne D on June 22, 2011 at 3:21am

It seams like East/Shell only shows up when other offers or situations arise. I recently received A letter from a neighbor with several hundred acres Who out of court , challenged the legality of holding the acreage in a pool with a vertical well just a day before the lease expired. East released the lease for fear of a lawsuit that might have set a precedent -setting ruling defining "Held by Production". My neighbor is working on getting a large block of adjoining unleased land together to negotiate . I was happy to hear of some one finally standing up to this situation.

Permalink Reply by Lynn Wigglesworth on June 22, 2011 at 2:00am

Was that 3-D seismic testing, where they come on your property, string wires, drill holes and plant explosives? Seems very invasive to me...the guy said they make "deer trails", but they have to be big enough to get a skidsteer through (big deer!). That's what this testing is. I understand they did a simple 'walk through' test with some kind of hand-held equipment a while back.

They didn't invite me to a BBQ...in fact, they haven't offered me anything (even though I'm not leased).

Permalink Reply by Brian V. on June 22, 2011 at 2:47am
The 2009 seismic was 3d and covered (according to the permit agent and all the lines seen over a 3-4 month period) an area from the Stoney Fork area of Delmar all the way to just west of Mansfield. We allowed it and messed with them a bit just for fun. They said they needed to cut  4' wide paths and don't cut anything bigger than 3" in diameter. So we told them to go get an estimate from a tree farm for what a 3" diameter oak, cherry, or maple tree is worth and that we would be keeping tabs on how many they cut and expecting a check for the damages. They ended up not doing the shot holes through our wooded areas and just walked the cables out. This is one time I was glad we were not leased because we actually could have a say in how they did their work on our property. They were quick and efficient. They left a few flags and a cable but overall we were pleased. Don't be afraid to mess with the permit guys a bit. They want something from you and if your leased they already have the right but even still they have to respect your wishes within reason.
Permalink Reply by Lynn Wigglesworth on June 22, 2011 at 3:07am

I really don't want them messing up my woods, but I figured this is my chance to get the landman to come to me (I haven't seen one since 2009). I was hesitant to contact them because it might make me look desperate, but I do want them to know I'm interested if they are willing to negotiate a little.

According to everyone I've talked to, I still have plenty of time if Shell can't come up with an offer I like. Speculation is that they might only put in ONE horizontal at a time in each unit (I was assuming they would do all 6 at once).  They may even put the units online with just the vertical well. There is a glut of gas and the Tenneco pipeline is at capacity. It will be a couple of years before they have more capacity, so dumping a lot of gas in it right now isn't feasible. This is a very long-term play. Crunch time for me won't come until they put in the horizontal that involves my property.  Still, I'd like to start getting even small royalty checks if I can make a suitable deal.

Permalink Reply by Ann Ticopa on June 22, 2011 at 3:01am
In Jan 2010, Long sent out letters (as leasing agent for East) saying that Conquest would be doing a seismic survey in at least parts of Sullivan, Rutland, Richmond, Tioga, and Covington Twps.  In part of that area, they did the Survey part, flagging access points,  paths for their equipment, and shothole positions. But they stopped short of the Line Clearance phase.  (Most of) the flagging tape and stakes were removed and that was that.
Permalink Reply by Wayne D on June 22, 2011 at 2:55am

I remember the BBQ it was at the fireman's annex , it was open to the public. It was to explain the seismic testing . the 3d testing was the cables and blasting test holes. The deer paths were the mulching machines . I think the original permission slips were to east , but they used a sub contractor for the testing. If I didn't have a 90 day clause and saw people on my property , I would rescind my permission. I think if you are leased permission would be included in lease agreement. I signed with east but the did not accept addendums and never paid bonus. They later countered with more per acre and less addendums . I responded that those would be OK but the lease would need to be a " non surface lease " . They never wanted to add any additional compensation for well pad or roads . This was about 6months ago and haven't heard anything from them since. The last offer was 2000 and 15%.

Permalink Reply by Ann Ticopa on June 22, 2011 at 3:45am
What the Long/East/Conquest letter said was that the mulched "paths" for a shot hole drill would be 10-12' wide.  The receiving line "deer paths" would be 4' wide and hand cut.
Permalink Reply by Lynn Wigglesworth on June 22, 2011 at 4:29am
Wow; the permission letter says "The survey is low impact with no or very minimal damage done to your property".  That's all it says, except that Shell would be responsible for any damage. No mention of paths, shot holes, or anything.  A 10-12' path would NOT be low impact.

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