Replies to This Discussion

Permalink Reply by 0i7okn54zwbdo on December 19, 2011 at 1:26pm

Only about 15% of land is drilled during the primary term (the first five years). If there is a drillable unit attached to your land then your chances will go up. Drillable units can be as small as 180 acres and the drillers will start by doing laterals oriented to the northwest. Hope that helps.

Permalink Reply by chris crowell on December 20, 2011 at 2:35am

What are drillable units?

Permalink Reply by 0i7okn54zwbdo on December 21, 2011 at 4:30pm

In Ohio there are spacing laws for conventional wells. In your county you need 40 contiguous acres to drill a Clinton well. For unconventional shale plays the unit size needs to be bigger. These laterals can run over 5,000'. As such they need more contiguous land to drill. Typical unit sizes so far have been 350+ acres, but I've seen units as small as 180 acres and potentially as large as 1280 acres. So if there's only 100 acres leased around you then the possibility of getting a well is lower than if you're connected to something larger, say 400 acres.

Permalink Reply by chris crowell on December 22, 2011 at 2:45am

thanks im not sure whats leased around us but that helps

Permalink Reply by Utica Shale on December 22, 2011 at 6:47pm

The smallest Drilling Unit that I know of is only 125 acres. It is in Columbiana County. The pad is being created now.

Permalink Reply by Utica Shale on December 22, 2011 at 6:45pm

Marcus,

 So, that means 85% of the landowners will become eligible for a 2nd term. Do a very high percentage of those landowner get paid for a second term?

Permalink Reply by 0i7okn54zwbdo on December 27, 2011 at 3:34am

It depends. In the Barnett Shale there is a concentration of very good wells and then a pile of uneconomic wells on the outskirts of the sweet spot(s). If you live in a good area that has successful wells the chances are that the secondary term will be paid. If you live in a poor zone the company that owns your lease my just let it drop. Then again CHK has shown that they hate their money and are willing to drill uneconomic wells to hold the land and pay secondary terms even if the land isn't in the best spots. So who knows what's going to happen. Let's say that Carroll and Columbiana counties are the best areas. If you're an E&P company would you spend millions in say Monroe county or would you concentrate your efforts in the best areas? This thing is still in its infancy.