karen oliphant lappin's Discussions
Why would shell sign up small parts of a farm and not the whole acreage?
Started this discussion. Last reply by Clinton44 Apr 30, 2012. 4 Replies 0 Likes
We have a small farm in Venango County and my brother owns 10 acres and he signed a lease with Shell. My other brother owns 5 acres and was signed up but the remaining farm which the three of us…Continue
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- Introduce Yourself
- My brothers have both leased thier small properties to shell (10 acres and 5 acres) but the larger farm of which I am on the deed with them was not leased. Can you explain why that would be right? I can supply the address if that would be helpful, Karen Oliphant Lappin
- What is your role?
- Landowner
- Which state(s) are you following?
- Pennsylvania
- What shale plays do you follow?
- Marcellus, Utica
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Karen,
I am not familiar with your exact scenario, nor is Long Consulting Group assigned the area in and around Venango County so I don't have intimate knowledge of that area, but I can offer a couple of possible scenarios that may provide some comfort.
1. Leasing boundary lines are generally County lines and sometimes township lines, so if the farm that you own collectively with your brothers is in a different township than the other properties that are already leased then maybe its outside of the prospect boundary?
2. Is it possible that the farm is already involved with a current lease? Maybe there is an old well that is still in production?
3. Is it possible that you and your family do not own the Oil and Gas Rights under the farm?
From the operators side it doesn't make any sense not to want a lease on the larger parcel. Generally speaking there is a progression that takes place with companies focusing on leasing the larger tracts in the beginning of the program and filling in the smaller tracts as they get closer to drilling. I am going to wager that one of the three scenarios above applies in your case. I suggest that you contact the agent that leased the other two tracts and see what information he/she can find out for you in regards to the family farm.
In response to several of the comments above a "pooling unit" or "declaration of pooling" is a schedule and an exhibit that gets filed at the courthouse when a well is to be or has been drilled. It must be placed of record by the operator prior to the expiration of the first lease to be contained within the unit. It will represent where the surface location of the well and a schedule of all of the properties to be included and what their proportionate share of the unit is. An operator cannot "take" gas from an unleased property.
Check with the lease agent and see what he comes back with. I'm sure there is a logical explanation to it all. Most likely they will be happy to hear from you seeing how you have an interest in leasing it!!
Best of luck.
--Todd