Michael Antrim
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Division Orders and interest decimal verification

Started this discussion. Last reply by James Foster Sep 9, 2014. 22 Replies

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Pennsylvania

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At 12:42pm on June 10, 2009, Rita McConnell said…
Keep calling -- go to the web site and find he top land persn and keep calling.

You are correct to add non monetary costs into your equation. But if its a six well, and you're on the edge of the lateral, your impact is going to be -- or should be -- very minimal if any at all.

Good luck. Feel free to drop me a line anytime.
At 11:55am on June 10, 2009, Rita McConnell said…
There is a lot of activity going on up there now, and you're going to see more before the summer is out.

As far as expanding your lease goes, you will want to ask your driller directly what the intention is there.

I can tell you this. As far as horizontal drilling goes, there are often benefits to larger units and expanding out your lease. For instance, horizontal drilling often allows drillers to eliminate wasteful practices. Multiple horizontal wells can be drilled, offset, from a pad slightly larger than the 5 acre mark. This means fewer access roads, less traffic to and from sites, less contruction, shorter construction schedules and so on than when the driller is forced to drill from multiple pads to get the same production (a well on your place, one on your nieghbors, etc). So there's an efficiency and community preservation aspect to this.

Lateral lines can be drilled longer as well with this method -- so while the actual wells may not be on your property, the lateral lines coud run underneath a large amount of your acreage -- or it could be under just a small portion of the land you leased. In most cases, you will be paid royalty based on your lease and the number of acres you contribute to the actual unit (so if you have 100 acres, and the well only impacts 50, your royalty is on the 50). Companies vary on how they treat the unaffected 50 after the lease terms expire.

However -- before you think that means a smaller royalty, consider this -- one horizontal Marcellus well can bring in as much as 9 times the production of a vertical well -- if multiple wells are drilled on the pad, you have a greater chance of having a share of a really well producing well. Even better, if they all come in high producers, you have a share in them all. Yes its a fraction of the overall royalty, based on your contribution, but it could still be more money if the wells are good wells.

All of that is contingent on well placement, geology, completion and production, and all drilling companies do not plan their units the same way. So, talk to your driller. And before you sign anything, have a lawyer look over the amendment to be sure its still a good deal for you. Look for one who really understands the Marcellus and has experience with it, not necessarily one schooled in more traditional wells.

And keep in mind, I speak from my experiences with another company. Things don't always translate easily.
At 11:22am on June 10, 2009, Rita McConnell said…
A few quick questions, just to make sure I don't confuse things-- 1. are you in NEPA? 2.are you leased to EXCO-NCE? 3.is the site across the street one of our sites? and 4. if we have leased with you, are you a member of teh Greenfield Group?
At 10:16am on June 10, 2009, Rita McConnell said…
I'm a consulant to EXCO-North Coast Energy and an oil & gas landowner (not with my own company). My comments are from documented sources -- primarily PA DEP.
 
 
 

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