Replies to This Discussion

Permalink Reply by jami d on April 13, 2012 at 5:51pm

Utica,

I contacted ODNR. The guy explained the difference between "mandatory pooling" and "unitization." "Mandatory pooling" is the term they use for forced pooling in an urban area (defined as 5,000+ people with very small parcels). It hasn't happened with the horizontal wells (because nobody is going to put a horizontal well in the middle of someplace like Columbiana). BUT, he said what they call "unitization" is something very similar for rural areas. "Unitization" is somewhat more landowner friendly. The driller must have at least 65% of acreage already leased and must make a reasonable attempt to get all other property leased. Then they can apply for "unitization" and it goes before a panel. If the panel approves, then the landowner has a handful of options (signing lease and getting same bonus/royalties as neighbors, working interest owner, etc). This is different than the "mandatory pooling" in urban areas. In that case, the driller must have 90% of properties leased. If panel approves, landowner can be given royalties only (no lease and no lease bonus). And YES, the guy from ODNR said there was a recent case of "unitization" for a horizontal well, but he didn't know offhand where in ohio (probably where you heard, I'm guessing). The landowner attended the hearing and said he would have signed the lease if he had been given a good lease like his neighbors had. (It wasn't a true holdout landowner for environmental or other reasons.) ODNR guy said driller must first make sincere, documented attempt to get landowners signed. I think he said it costs $5,000 to apply for unitization (pocket change). He made it sound like drillers probably wouldn't be rushing to do it. I also asked about holdout landowners, and he said the technology is there to drill around parcels. Obviously not if you're pretty close to the well pad, but the farther away, it sounds like they can twist and turn to avoid some properties.

Permalink Reply by Kathleen on April 14, 2012 at 1:17am

This is more in line of what I read before somewhere. Did he say they only have a handful of utiliziations a year they can ask for? I read they can not do this over and over just to make their lives easier. The 65% doesn't sound landowner friendly though, but I know the rest of the law is. Did the odnr guy say what they did with that landowner in the long run.
I wish the attorney general would issue a clear statement, easy to find or sent to homes concerning some issues they must be getting complaints about, this being one of them and the one about draining under you with zero payment. I think it was the county engineer or someone from the county here (columbiana) sent out simple guidelines on leasing. It was vague though.
I just searched odnr for utilization, forced utilization and a few other ways and nothing of value comes up. This info has to be easier to find.

Permalink Reply by jami d on April 14, 2012 at 3:07am

Yes, I only saw the "mandatory pooling" on ODNR website, and it sounded crazy. The guy I chatted with metnioned "unitization" almost as an afterthought. But to me it's really the same thing. He made it sound like it takes money and time and thought the drillers would avoid if they could. I didn't ask if there was a limit to how many they can seek. But the driller does have to pay a fee to apply for unitization. And the state looks at all of the info before they take it to a panel. ODNR guy made it sound like drillers would do what they could to avoid the process (such as drilling around properties, etc.) The driller does have to prove that they made a strong attempt to get landowners signed before state will even consider letting them take it to a panel for review. He did say they can't just use it to make their lives easier, but once they prove they've made strong attempts, it sounds like they can move forward with the process.

Permalink Reply by Kathleen on April 14, 2012 at 6:29am

That makes sense. Now do not take this as fact since I can not find it again but a few months ago while searching pooling I ran into a gov. site that said it was around five a year they were allowed to force in or apply to force in.. I'm not sure if that's per county or state, that I do not remember reading.

Permalink Reply by David L Humphrey on April 5, 2012 at 4:24pm

In our case, DPS Reps are putting on the pressure to "sign now or miss out", because we are in a Production Unit for a proposed well.  However, tiny acreage here.  They say they "will go around us" and "extract our gas anyway" (just the DPS guy talking), but have not read anywhere here yet that they actually can do that - seems like a threat coming from a landman who just wants to make a signing now in order to originate income for DPS.  What better time to strike at the fears of small landowners than when lease signing bonuses have dropped and it APPEARS that a person will "miss the boat" as you said?  PLUS, it is all written on "their" boilerplate lease, and with tiny acreage, no Community Group wants us, and any attorney in this area of expertise is buried in larger deals.  Also, the DPS landmen seem to be preying on the older individuals in the community (well, just barely older then me....!) - IMO - because those folks are only looking at the value of the signing bonus and not the benefits of a long-term lease relationship, which seems unethical on the part of the landmen to us.  This also weakens the chance of any remaining neighbors getting together to coordinate/combine and negotiate small acreage leases, because property has already been cherry-picked and signed up within the community.

When our Production Unit well gets closer (not even a pad yet), won't that be the time they will re-visit and negotiate ALL acreage owners that are located in (at least) their "rectangle" and make a better offer?

Thanks in advance for any replies.....

Permalink Reply by Kathleen on April 6, 2012 at 1:26am

The dps man came to a neighbor of mine and said a well was planned and he would receive $$ monthly, would miss out if he didn't sign blah,blah. I called that dps man and asked where was the well going. He said "they dont give us that type of information. We only have the maps showing who isn't signed"
I, believe the same is being done to you. There is so much activity going on its nice to believe a well is coming so I think that's one of the new tactics.
I wish you luck and don't believe them.

Permalink Reply by jami d on April 6, 2012 at 7:27am

Kathleen: we know there is a permitted well a half mile from our house. Stakes were up and permit is on ODNR website. Water has been sampled. Pad hasn't been built and is facing some obstacles with a holdout landowner and the city of columbiana finally realizing maybe it isn't a good idea to have this well so close to city water supply. The chance of us not being in the unit is remote.

Permalink Reply by David L Humphrey on April 6, 2012 at 10:50am

The DPS man I first talked to claimed "he was looking at" a map, showing the rectangular "potential" Production Unit, and our Salem Township, Columbiana County property (and those of our neighbors) were definitely in the rectangle.  So, I said the first thing I would like to ask for is a copy of that map so I can also see it.  He said "Sure!", and that he would drop it off (I should have made him email it to me then...).  Instead, he dropped off in my front door lease documents ready to sign.  That was a huge leap on DPS's part!  Still no map for me, our original DPS man has moved on to another county, and can't get anyone else to answer the phone.

I've seen the Production Unit Maps attached to some replies on these discussion forums, aren't they the same ones I'm wanting to see for the "potential" well in Salem Township?

Permalink Reply by jami d on April 13, 2012 at 5:32pm

I talked to a guy at ODNR, and he explained the difference between drilling units and production units. If the DPS guy had a map, it would be the driller's planned production unit maybe. The maps on this site are drilling units. Those maps are submitted to the state to acquire the permits. All of the properties in the drilling units have to be leased before a permit is issued. Once permit is issued, maps show up on ODNR website. That's why there are no maps available for some wells. Driller is still trying to get people leased. ODNR guy said state doublechecks to make sure everyone is leased.

Permalink Reply by jami d on April 6, 2012 at 7:25am

David: which well are you? How big is your property? We are on edge of columbiana near jean ward well. about 6 acres. They have already picked off some neighbors. Smart ones already grouped with ALOV or an attorney. We aren't keen on signing in general. Kinda procrastinated. Now this is where we're at.

Permalink Reply by David L Humphrey on April 6, 2012 at 10:59am

Jami d:

We are all just about an acre in our residential community (see my reply to Kathleen above).  Never thought we would even be involved in this O & G thing with that small of acreage!  Does not seem even worth paying a lawyer his cut to negotiate, unless they agree to a per-hour basis (up to the amount they would have received for a percentage fee) for a small acreage deal, even if my neighbors and I coordinate our intentions.

Not greedy in all this; just can't stand the unfairness of it all from one landowner deal to the next - and I am very doubtful they will "get it right" when it comes time for all the bookkeeping it will take to keep track of all these different deals and minute details that are contained in these documents.  How will you ever trust that the eventual royalty check is even correct??

Permalink Reply by JDM on April 12, 2012 at 2:03am

Jami-  have you decided what you were going to do....landgroup....lawyer or what? I am in the same situation as you. We are on the edge of columbiana (town)but are in mahoning county...near Whitmer's feed mill off of rt46.  We are in the same boat...didn't want to sign at all now wondering what we should do.

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