Important: Force Pooling in Ohio

  Upon viewing this thread http://gomarcellusshale.com/group/carrollcountyohio/forum/topics/in... I sent a email to the ODNR O&G Chief to get a answer on this.

 

Hello Mr Erdos
  I would like clarification upon the issue of forced pooling. I have looked at the issue with the information supplied at the ODNR O&G website. However it is very loose in the terms of what would be considered a offer by a O&G company that would be acceptable by your office in approving of forced pooling of a individuals property. I took this from the Go Marcellus Shale web site: http://gomarcellusshale.com/group/carrollcountyohio/forum/topics/in...
In part:

Just received an interesting phone call from a landman that's working for Kenyon/Chesapeake.  We have 92 acres - 78 is leased and the remainder was on an old lease that expired in February and is now "unleased".  We have taken a "let's wait and see" approach with this 14 acre parcel and have been contacted by a couple of different landmen about leasing over the last few months. 

The most recent offer was a couple of weeks ago at $5800/acre with a gross 20% royalty and acceptance of the SURE or ALOV lease by Kenyon/Chesapeake.  Our caller today told us that Chesapeake has told them (the landmen) that they can no longer make that offer.  They can only ask for $5000/acre with a NET royalty and may only use the original "base" Chesapeake lease, and there's no guarantee they can get that. 

The landman also indicated that we should read up on "forced pooling", because now that Chesapeake has over 95% of the land in Carroll County under lease, they will begin forcing the unleased owners to be pooled into their units at their terms and 1/8 royalty.  He indicated that the "competition" has left town and Chesapeake no longer has any incentive to increase the prospective lease terms. 

Is anyone else hearing this same info?  Personally, I think its a scare tactic to get people to sign...especially since we heard very similar comments from a landman "long ago" when they were trying to get us to sign our 78 acre parcel for $600 an acre (which we didn't do, by the way).  Just thought I'd pass the info along though and see if anyone else cares to comment.

  I would hope that the ODNR would consider the Constitution in regards to the taking of personal property in regards to this issue. 

 

My question is would the ODNR consider the outdated old standard of minimal lease value and only 1/8th royalty or would the ODNR require the requester of a forced pooling request to at least make the current landowner friendly lease terms, lease bonus and royalty being offered in the state as the basis? 
 Thank You
Billy P. Whyde
  What do you think will be the answer?

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Permalink Reply by Todd Smith on May 3, 2012 at 4:58am

Billy P. Park,

I thank you for the heads up call on this.  I am a landowner who hasn't leased as of yet int Tuscarawas County.

I only have a mere 20 acres, but I too was contacted a few different times.  I am in the military and not able to get

back to my "retirement parcel" too often to conduct business.  Your information and the response it may recieve will prove interesting and educational.

Todd Smith

Permalink Reply by Billy Park Whyde on May 3, 2012 at 5:42am

Yw welcome former USN here Nam vet. 

Update:

Billy Whyde
12:41 PM (0 minutes ago)
to Lanny
Thank you for forwarding it to  Mike McCormac, Oil & Gas Mgr. .


On Thu, May 3, 2012 at 12:10 PM, Erdos, Lanny a href="mailto:Lanny.Erdos@dnr.state.oh.us" target="_blank">Lanny.Erdos@dnr.state.oh.us> wrote:
Mr. Whyde:
 
Thank you for inquiry, but you will need to contact someone from ODNR's Oil & Gas Division to respond to your questions.  I have included cc to Mike McCormac, Oil & Gas Mgr.
 

Lanny E. Erdos 
Chief 
ODNR, Division of Mineral Resources Management 
330-284-3021 (cell) 
  
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Permalink Reply by Kathleen on May 4, 2012 at 12:31pm
I'm guessing they are either going to ignore it after this first forward (I wrote in recently about marcellus wells and received a similar replay and never heard back) or they will just quote some law concerning the oil and gas have only so many tries at forced pooling a year and not answer the royalty issue in the email.
My bets are you don't hear back since they honestly don't have a good answer. I think issues like this if to happen will land up in court.
Permalink Reply by Billy Park Whyde on May 4, 2012 at 1:36pm

That's why they are paid to make decisions!

Permalink Reply by bo boboski on May 4, 2012 at 3:57pm

I'm thinking the subject of "forced pooling" is gonna get alot of attention in the coming months/years here in Ohio. Especially with landowners with less than 10 acres. Will the O&G companies be able to have their way with these parcels &  their owners?Will the ohio laws protect them? What do these people need to know now before they get taken?

Permalink Reply by time will tell on May 5, 2012 at 1:18am

Billy , who told you that you that Erdos is the chief of the odnr . The chief is Rick Simmers unless they have more than 1 chief .

Permalink Reply by Billy Park Whyde on May 5, 2012 at 2:34am

Hi Ridgeman it was my mistake I looked quickly on the ODNR site of the O&G and clicked on contact and poof:

Chief, Division of Mineral Resources Management; Mine Safety Program Administrator 

I only homed in on the title lol!

Permalink Reply by time will tell on May 5, 2012 at 2:45am

LOL Billy  .  Thank you for your USN service also !

Permalink Reply by Billy Park Whyde on May 5, 2012 at 3:34am

 I am going to rework this request and will post it a bit latter on this weekend. TY 

Permalink Reply by KLB on May 5, 2012 at 2:14am

Billy, we received the same phone call yesterday from our Kenyon/Chesapeake landman.  We had a 5800/ 20 % "market enhancement" royalty lease offer that had been around for about a month.  We were told that those terms were gone.  Our landman said that he could get $5000 with net royalties and their standard lease form until Tuesday.  Then, it's dropping again. 

When we asked him a while back about forced pooling, he said that if they force pooled, you would get the average of what the others in your unit got for royalties.  Not sure if that's true at all, though. 

Permalink Reply by Billy Park Whyde on May 5, 2012 at 3:35am

KLB looks as though they are still hungry for more land don't it? 

Permalink Reply by KLB on May 5, 2012 at 4:16am

I think that they want every inch of Carroll county!  And, we don't have much.  It's our yard we are talking about and we just want it to stay as it is.  They are signing up all of Magnolia, no matter how big your acreage. I said something to our landman about it being really hard to sign with Chesapeake right now when they are only offering a pretty bad lease and the company CEO is in the news for all of his questionable business dealings. 

I would be very upset if the state of Ohio said that I had to sign away the rights to my land,  in a very one-sided lease, with low payments, to a company whose CEO is being investigated by the SEC.  I think that wouldn't feel like America to me!

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