Replies to This Discussion

Permalink Reply by Brent Laner on July 30, 2011 at 4:53pm

And for Nate on his F&M comments, do you work as a landman for Greenwood?

Permalink Reply by Nate on July 31, 2011 at 4:18am

Yep, Sierra Resources did a deal with my company, and over 10 other local producers. I've been helping them build onto their acreage blocks with greenwood. But how does this corellate to F&M telling their clients you can keep your clinton but when the rubber meets the road you cannot.

Permalink Reply by Brent Laner on July 31, 2011 at 12:03pm

I was at every F&M meeting in Tusc County and I don't recall the issue of Clinton wells being addressed. Are you saying if I have a producing Clinton well, Chesapeake will shut it down before drilling for the Utica?

Permalink Reply by Nate on July 31, 2011 at 2:58pm

They won't shut it down, but in the case of my friend who had 60 acres and planned on having a local producer drill him a Clinton well; He had to forgo that right and lease all formations to Chk even though the F&M boys told him the whole time he would be able to reserve it. But he can make his own decisions and chose to take the bird in the hand.

Permalink Reply by Brent Laner on August 1, 2011 at 1:30am

Why doesn't he just lease his Clinton formation prior to leasing the rest to CHK?

Permalink Reply by Nate on August 1, 2011 at 1:46am

I agree he should have done that. I didn't know he did any of this without talking to me. But the point here is one of the F&M groups selling points was "we're going to let you keep part of your lease." So they get people on board and after they are close to the end they lose that right. This whole leasing is being over lawyered - even by ones who don't understand the business.

Permalink Reply by Al Cramblett on August 1, 2011 at 3:55am

Amen, Nate! From my perspective the problem is that many of the landowner group negotiators are going for a large signing bonus at the expense of a reasonable royalty percentage and a more land owner friendly release. Wonder why that is?

Permalink Reply by Brent Laner on August 1, 2011 at 8:46am

I don't know Al, 17.5% gross sounds pretty good to me, As of now I haven't heard much better than that. If the recent Chesapeake report was on the table, then maybe push it. Like Kenny Rogers said you got to know when to hold and when to fold. Sure would be nice to have a crystal ball! I believe the ALOV group did have some formation specific language in their lease.

Permalink Reply by Al Cramblett on August 1, 2011 at 1:40pm

SURE received $3500/20% gross. Right now I'm looking at a oil and gas drilling partnership offering, and the royalty being paid is 25%.

Permalink Reply by AT on July 30, 2011 at 1:34am

http://www.heraldstaronline.com/page/content.detail/id/562230.html

Permalink Reply by Al Cramblett on July 30, 2011 at 2:00am

AT, thanks for the post above. While I agree with much of what the Chesapeake representative stated, the article is self serving. We knew over 100 years ago there was oil beneath the surface in Harrison County. Only a fraction of that oil has been extracted. With the advent of horizontal drilling and fracturing technology, landowners in Harrison County have the ability to become millionaires as long as they educate themselves before signing a lease. God has blessed all in eastern Ohio! The challenge now becomes: "will we humans do the right thing in terms of leaving a legacy and minimizing the environmental impact of drilling?"

Permalink Reply by scott jackovitch on July 30, 2011 at 2:06am

I hope so !

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