UN-Official ALOV Update

This will be the first post i have started here. I have weighed in from time to time with my two cents worth, and i have tried to be constructive and positive with only a few rants and outburst's, but hey everybody has a bad day now and again.

What i wish to say, is remind everyone of a few things as i see them they are factual.

1) This site is first and foremost a site for Industry Proffesionals. Lets keep this in mind. Our site administrator has created this place for us landowners to interact with each other and the industry, but lets not forget it is monitored by the O&G Industry at large.

2) The O&G Industry and its shareholders have gotten accustomed to BIG PROFITS and their not yet feeling full. They still have to eat. What i mean is this. The easiest cost to control in an organization is that cost closet to the bottom of the supply line. In some industries this is raw materials and labor. In this Industry it is acreage and its lease costs.

3) The industry will manipulate us as we allow them to, in order to keep the cost to them for our OGM rights in line with their budgetary projections. A) Not everyone will be who they say they are, or give factual information to you. B) Land-Owner Groups and Recently Educated Land-Owners to the Shale Play ways are a possible upset to this control of lease aquisitions to them. C) It will be in their best interest to have us fight amongst ourselves to "take our eye off the prize" so to speak.

So with that said, i after having another visit from a recently new friend, today for coffee, i decided to give ALOV a call, as i am a Trumbull county landowner looking to lease my farm if the lease and offering is right. The conversation with the ALOV rep.i spoke with today was very pleasant and constructive. And what i took away from it was this. Mr. Rae and all of the staff and Volunteers are still working hard to bring you, the Trumbull county landowners, what you want.

Buckeye Mineral will be their main focus only for the other areas and landowners not involved in ALOV to this close of the Trumbull county group this Saturday. ALOV wiil be no more after this deal, he will offer to assist other landowners after this business is done, and if you dont like the terms are free to go on to whatever works best for you. I dont see this as a conflict as he is not out their talking you out of signing up with ALOV, and he could have closed up shop on this without even taking on Northern Trumbull county. But he didn't, he is here to help us, and in doing that he is really helping us all, in other indirect ways.

They have indicated to me again and again when i call for updates, they will not budge on the addendums in their proposed lease, that are their to protect us and our lands now and for future generations. You cant put a price on that, in my book. This is part of what has taken so long in the negotiations, as this is what we said we expect from them.

They have several different bidders on all or part of the package, and will not put at risk the integrity of the negotiations. These are big players that are brought to the table and any miss step could undue all their work, so they are playing this slow and carefull. Would you expect less from them?

I have their good word that they have hopes of bringing a vote to the table yet this year for us to say 1) Yes, We Will Accept 2)or No, keep working on it in 2012.

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Permalink Reply by James Kerns on December 7, 2011 at 9:33am

I posted this without review so please forgive my typos.

Lets all work together ALOV members, other groups and individuals. To keep the O&G industry, who will be our partners in this lets not forget, honest with us in word and deed. The history in this part of the world, for energy development, has been scarred with the Big Business OGM players taking great advantage of landowners, who most often were working with a serious lack of knowledge in all the aspects of this game.

Lets not let this happen again. Lets contiue to get educated, share in this knowledge, and be patient, we have what they want, its not going to go away. This does not mean we should ourseves be greedy or hard to deal with. But let us not be taken advantage of, we should refuse to be victims.

This, newly found to be economically worthwhile, shale play(s) is the closest undeveloped resource they have or likely will find, this close to the eastern seaboard. This is where the highest energy consumption is outside of China or India, i do believe. The delivery cost for this energy should be the lowest, and thereby the most cost effective for them to invest in, of all the hydrocarbon based energy sources known at this time. They want it, so time is on our side, i say slow down and do this right. Well all this is my best assesment of the situation at hand. Merry Christmas to all and Good Luck

Permalink Reply by James Kerns on December 7, 2011 at 10:27am

I went on to say this but i hunt and peck to dang slow and also their is no spell check option before you post. lol

 In most areas the infrastructure is not in place to put even the already drilled wells into production. You will first see major pipline projects along most every state highway, to update line capacity and allow for the much higher pressures. These wells operate at such extreme pressures as compared to lets say 30yr. old clinton wells, and the volume of gas is not even on the same page. You cannot push lets say 3,000psi at a 4inch line at the wellhead, for example, into a 4inch sales line along the roadbed, operating at 300-350psi. The old compressor stations were put in place often to pump lets say, a 100-120psi wellhead line pressures into a CNG line at 350psi. So consider the scope of what must happen to safely market these new found riches. Even if you are one of the first to get drilled on you most likely will not see any royalty checks for awhile, unless in foresight the last time they re-worked an old Clinton well or the last time they replaced old rotten sales lines they updated line sizes and pressure capacity's, looking forward to one day drilling these deeper formations.

So i submit we slow down, i know we could all use the cash right now, thats what these companies and their landmen are counting on, lets take a deep breath and think with our heads not our hearts. Lets put the right legal protections in place, make the deals we can live with, and go on from there.

Lets not let these double agents and poser's play us one against the other to the point nothing constructive can get done. There i've said about all i can say on this. Thank you for taking the time to read this and good luck to all.

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 7, 2011 at 3:39pm

Hi James,

thank you for posting and putting such good wisdom in your input.  Many of us landowners have either signed a lease, are looking to, or have inherited or bought one already done.  What we can do here is learn and educate ourselves and each other as you surely have stated already.

What you say in your discussion post (btw you can click on edit to change info in the posts but not so on the comments after they have timed out on posting)....about this:

They have indicated to me again and again when i call for updates, they will not budge on the addendums in their proposed lease

 

 So that is why most of us landowners are here James....because the oil company wouldn't budge on some of their clauses/statements in the contract for lease.   Now we go online trying to learn just what have we done?...we share...we learn...but we cannot change what the oil companies have done in making a way that they profit and we look at the contract and say...oh, how did they get me to sign this?  I think that the oil companies wouldn't give China or a company in India such a contract as that flimsy one they have been using in Pa....oh no, they wouldn't ...nor would they sign one themselves.

Pls take your time to lease...the prices will go higher.....so take your time....learn, absorb here at the forum...  Pls read my discussion post about the contract clauses...glad to greet you!

http://gomarcellusshale.com/forum/topics/look-at-the-clauses-not-just

 

one of the ways I feel that I vent my frustration over what they did by cheating my dad (he is deceased) is to share with all of you the fact that we as landowners deserve much better by posting what I have learned and thankful for those of you that spend your time also improving the situation with your sharing as well.

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 7, 2011 at 3:56pm

....(i copied and pasted this from a discussion here....I hope some oil company executives read this)

Personally I think it is about time that these O & G companies update their contracts and get on a standard contract (the real estate brokers in the states do)...so that both lessor and lessee rights/interests/penalties is more stated in the contract rather than hoping that you or your lawyer knows what clauses to put in an addendum.   An addendum should be used more for special requests or provisions not to be the contract.   But these O & G contracts are sooo out of date that addendums are used. 

Now if you just say...well they are going to use what contract they want rather than what is just towards the landowner.   Let me say, when I recently found that the oil company put some of my acreage in a unit (which they didn't call me to tell me and it had already been months) the representative from Chief said..."oh..you don't have a Pugh clause in your lease...too bad...as I see you used an old contract."  (OLD contract..even the secretary at Chief Co. knew it was an old contract ...though done in 2008) (why didn't the landagent ask for a more modern contract to use?)  It is time we landowners get smarter and demand that the lease contracts be updated so that the guessing of what should be on an addendum starts being the form contract.    You lawyers out there do see what you can do to enforce the O & G to rewrite a contract rather than rely on an addendum.  

 If some of you don't know what I mean by a form contract standardized....just check with a reputable real estate broker and you will find that there usually is a standard contract that is revised periodically that is acceptable in many parts of your state or all and usually has a balance of fairness for both buyer or seller...so it is that the O & G leases shouldn't be onesided for the lessee...in fact the O & G companies would save much $$$$ from being in lawsuits by just updating their contract leases to give both lessor and lessee a more fair workable relationship.   There even should be a requirement that when leases are assigned that the Lessor must either receive knowledge of the assignment (in some cases maybe even approve the assignment or request monies upon such an assignment).   The assignment is normally where the Lessee makes quick money off what they bargained with you for...and in some situations you don't even know who has the lease if they sold the whole lease out.    A very important clause that 'assignabilty' clause and worthy of negotiation for  the Lessor.

I hope that there will come a time when the lessee realizes that the ongoing relationship with the Lessor is the most important process of the O & G contract/drilling/profit.   How many of you that own a rental home would rent it to a renter that would not inform you when they rent it to another, make gain off your home rental amount, and would have you chasing them to find out what is going on?  and even tell you that it is your fault cause you didn't put those provisions in the rental contract with them?  I daresay none of you...yet we will allow the lessee to do these things and use our land resources?  And why don't they appropriately work with the Lessor since we both went into this for profit anyway?

http://gomarcellusshale.com/forum/topics/how-many-of-you-would-pref...

Yes..it would be good to work better towards making all this NG process work...but clearly the oil companies need to start caring about the relationship with the Landowner by first caring about whether they will utilize a 'fair' 'balanced' contract between Lessor and Lessee...not the junk they have out there.

 

Permalink Reply by James Kerns on December 19, 2011 at 1:56pm

VG, Sorry to respond so late, i forgot i posted this originally. They say the mind is the first thing to go, and i dont even have old age to blame, oh well.

Yes i can appreciate the pickle you find yourself in here. And you make some great constructive points to consider. I think the thing to best take away from this is, your dad sounded like a good and trusting man, sadly, he let his guard down and big business did what big business does, i am sorry to hear about it.

 Lesson we should learn from so many past landowners mistakes, is educate ourselves on the topics, don't make a decision until we do, then have competant legal help before we sign anything. It would also help if we, like you said, had somewhere to go to view a lease agreement that was more even-handed and land-owner friendly.

Well now we have these things, but we still must empower ourselves and have the savy and fortitude to stand up to the company's, take them to task, and let them know our terms or they can just go back to indochina or southeast asia, india or whatever for the next big thing, to develop and they can pay those huge transportation fees out of pocket, to get the energy to where it is needed.

There is so much relatively clean energy right here where it is most needed. We are in the Driver seat on this one.

Permalink Reply by James Kerns on December 19, 2011 at 1:37pm

The person i spoke with from ALOV, the day i posted this, was Katie Rae (Bob's daughter) and i had hopes of hearing good news today, that a deal had been proposed, and a vote was in order.

Lets hope to hear something this week.

Permalink Reply by Bill anders on December 20, 2011 at 6:19am

and Katie's background concerning consulting or oil/gas?

Permalink Reply by Craig Stull on December 20, 2011 at 7:19am

Bill, That is none of your business what Katies background is, what is your background (flipper)! 

  You made a statement on November 30 that both (shell and chesapeake drilled wells near Trumbull county and neither turned out). This is why each is not pursuing Trumbull and northern Mahoning). You was asked to back up your statement and you never did.   WHY??

BECOUSE IT IS NOT TRUE.          

Permalink Reply by James Kerns on December 20, 2011 at 8:37am

Bill, All i know is that she was working the phone that day, and being his daughter, i figured she would be in the know.

I have four children, two boys and two girls, fifteen year old to a twenty seven year old grown and living his own life out of state. The point is anyone of them could give you a complete recital and details of the family business ventures if they cared to, why would i expect his family members would not be able to give an accurate update of this, something their father has worked tirelessly on for probably almost two years now, having gotten great monetary deals and the best yet to date lease language, most professionals in the business have ever seen, for not one-but three groups now- and soon to be a fourth group to have a deal, i honestly believe will happen.

You rock tossers will jump at any target of opportunity, real or imagined.

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