Replies to This Discussion

Permalink Reply by Lynn Wigglesworth on August 18, 2011 at 5:54am

OK; I should change the title of this thread to 'nothing is happening'. The landman called today to tell me that...nothing is happening. It's been over 3 weeks since I asked for the terms on  a non-surface lease. He said someone at Shell resigned and the new guy will "take a couple of weeks to get up to speed". He said it would take at least that long to hear about a non-surface lease, but it sounded like he could offer me a standard lease right now. The whole thing smells fishy to me; I don't trust O&G companies, and I trust landmen even less.

Permalink Reply by Ann Ticopa on August 18, 2011 at 7:22am

Lynn,

I just don't think it's the right time to be looking for a good deal for the landowner.  Except in the Ward, Bloss, and Covington area, what production numbers there are aren't great.  I was surprised to find that SWEPI had let the permits expire on the additional 5 horizontals on a nearby single horizontal unit that's on the path of the gathering line going in now.  Shell does have deep pockets, but they aren't bottomless.  It may be that they're being more selective untill they see more production numbers. 

Permalink Reply by Lynn Wigglesworth on August 18, 2011 at 8:38am

The unit I would be in has been sitting since 2008; there's been no work done, no permits, etc. Just the vertical well. I don't see anything happening there for years. I'd love to tell them to take a hike if they DO offer me a lease, but I'm afraid that the situation might get even worse if I pass up leasing now;

 

I wonder if they are holding up the horizontal wells until they have the survey results. Do you know if anything is happening with the 3D survey? I still see the helicopter transporting something every few days, but no flags or anything around here.

Permalink Reply by Ann Ticopa on August 18, 2011 at 9:51am

I think they did some of the planned survey here last year because of - as you mention - the helicopters.  (Not unusual here because I'm pretty sure I'm on a medical helicopter route  But those move right along.)  Then, one day when I drove out for groceries, the blue/white flagging tapes marking their entrances from the road were gone. 

It's definitely a positive for TC that the gathering lines are going in.  But what's also needed is a significant expansion of the market for natural gas.  That's not going to happen overnight.  Not wishing for it, but a cold winter wouldn't hurt. 

Permalink Reply by Lynn Wigglesworth on August 26, 2011 at 3:15am

Another update; after several emails to Andrea Garrity at Shell, my non-surface lease has finally been approved. It's just the standard non-surface, $2000/15%, with no deductions royalty, hold harmless, and no title warranty addenda. I didn't bother with water testing (my water already has lots of undesirable things in it and I have an RO system) or no automatic extension (I'll be in a unit as soon as I sign), or PUGH (they absolutely won't give one). Having a non-surface lease takes care of all my other worried. The landman is getting the addenda and paperwork together and I'm supposed to sign tomorrow. I don't know why this has taken since June to get done.

Permalink Reply by paleface on August 26, 2011 at 6:06am

 Good for you Lynn sounds like a nice contract.I think they don't like pugh claus's because if they want to use your property in multiple drilling units that could cause a problem?

Permalink Reply by Ann Ticopa on August 26, 2011 at 7:55am

But that's June of *this* year ... which is downright speedy for those not willing to sign the standard lease. .  Glad it's coming together for you.  From what I've read, even gascos that did offer Pughs don't any more.  Imo, the water testing addendum they offered was mostly "cosmetic".  It didn't say what they would test for and they'll probably test anyway for their own protection.

Permalink Reply by Lynn Wigglesworth on August 26, 2011 at 12:28pm

This lease is not as good as I wanted, but it's the best I'm likely to get, given that Shell has leased almost everything for miles around me.My options are to lease with Shell or don't lease, and the terms aren't getting any better. I'm trying to look long-term, and protect my property from damage, so the non-surface use is the most important feature to me.

Permalink Reply by Brian Day on August 26, 2011 at 1:12pm

At this point in the whole skeem of things, you will probably be as well off as anyone and better than most, Lynn.  I am glad that Andrea could help you out.  She got some matters settled for me about six months ago.  Shell has lots of good people working for them, I believe.  I just wish that they would flush out the old East crew.  When I have talked to several people in the oil and gas business out here in Wyoming about Shell, they say that Shell is a good company to work with.  Their checks are always good and on time.  They pay for things to be done right the first time.

Permalink Reply by Ann Ticopa on August 26, 2011 at 2:53pm

You're living where you want to be, doing what you want to do.  It's entirely reasonable you don't want to jeopordize that. 

 

Permalink Reply by Lynn Wigglesworth on August 28, 2011 at 1:02am

I signed the lease yesterday, so that part is done. Now I wait to see if they honor the draft (they have 90 days to pay it or not). Then the long wait for royalties...it could be years before they finish these units.

Permalink Reply by paleface on August 28, 2011 at 1:29am

 If you have wet gas there the wait might not be so long?

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