? regarding mineral rights already leased

Has anyone looked into forming groups for the landowners who already have their mineral rights leased - but under old contracts? 

In Harrison, Tuscarawas, and Guernsey counties, (and probably everywhere else), there are several companies holding mineral rights with working shallow wells that potentially don't have the equipment to reach Marcellus shale.  Immediately I think of Redhill (Dover, OH), Tipka Energy (New Phila, OH), and possibly Enervest (TX). Even if Redhill and Tipka can manage to come up with resources (millions) to do a couple of horizontal wells, I don't believe they have the billions of dollars of seed money that would be necessary to drill more than a couple.  Since larger chunks of ground are needed to pool enough acreage to make the Marcellus profitable, these companies will likely begin negotiating to sell/trade their rights to the larger companies (Greenwich, Chesepeake...) so they can get a bigger piece of the pie.   In such circumstances, the current leases may need to be revisited to add additional terms, ie pooling.  It would all depend upon their current wording.

Would it be beneficial for these leasees (landowners) to be in a position to actually 'negotiate' and not just agree to what is offered??  (I could forsee some companies just saying 'Here, we need to add this addendum to the lease agreement, sign off and you can be in on the Marcellus money', without really 'offering' anything over the % that is in the old lease).  Maybe there should be a group just for Tipka, and one just for RedHill, and etcetera.. so if the opportunity arises these people are more prepared (and organized) to get a reasonable deal. 

Everyone seems to assume that if a well is already present, then the landowner (leasee) has no say.  And I think this is mostly correct.  But if the old leases need modified, then doesn't that change things? Any comments (or maybe some info from someone with more knowledge than me) would be appreciated.  I could be thinking about this completely wrong. 

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Comment by Britney Robinson on August 31, 2011 at 8:57am

I understand when you are dealing with property that is held by production from a shallow well which was drilled on a old lease, there is much confusion as to how the old lease could still be in operation. One thing everyone needs to keep in mind, the oil & gas industry just like all industries has grown and advanced with the technology being used. Back in time when the leases were taken for all the oil & gas, the producers at the time didn’t know or didn’t have the resources to be able to drill at such depths nor did they have the horizontal drilling technology.

During today’s world the oil & gas companies need to modify the original lease to ensure the agreement allows for the issues the new technology brings, example pooling and unitization. If the landowner signs the modification allowing the new technology, they stand a much greater chance of making more money off of the oil & gas industry by receiving royalties from the new well!

Comment by V Miller on August 2, 2011 at 9:53pm

i would have interest in checking into your idea.  i think its a great idea.  we have a farm in guernsey county, which has an existing lease with Red Hill.  Lets keep this conversation going.

Comment by Carol Flanagan Cogar on July 29, 2011 at 11:03am

The lease that has been used here (Flanagan Heirs) was first signed in 1901,Needless to say it had to be revised.There was a amendment put on for pooling.There are 33 heirs on this list.Needless to say some did not sign,mostly the ones that live out of state.No drilling took place!! You have to have 100%of the people on list sign.I think the majority should rule here! Most of the people that are on the list are older and could have used the money.

I believe on Monday,August 1,2011 there is a special meeting with the governor on the forced pooling!Hope this goes through!!  Carol

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