Eclipse shallow drilling to extend leases

I have read several posts where folks have been "negotiating" extensions with Eclipse where old leases are fixing to expire over the next 4 to 6 months. Eclipse is stating they will drill a shallow well to hold lease if property owner does not agree to the extension terms (which are terrible). has anyone taken them to the end and actually have them drill a well?

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Permalink Reply by Philip Brutz on November 5, 2013 at 4:11pm
Permalink Reply by Gusher on November 5, 2013 at 4:21pm

Thanks for info, where do you get these reports?

Permalink Reply by Philip Brutz on November 6, 2013 at 9:11am

I used the user unfriendly ODNR Database http://oilandgas.ohiodnr.gov/well-information/oil-gas-well-database

The ODNR oil and gas well viewer is easier to use but not as powerful.

Permalink Reply by Tim Tarr on November 6, 2013 at 6:11am

Look over the "Lease Term" clause in the lease. It's possible just filing for a permit may hold a lease as long as delay rentals paid.

Now if a permit is filed and that well is not drilled in timely manner...? I would get competent legal advice before cashing ANY check for delay of rentals or anything else for that matter.

Permalink Reply by Gusher on November 6, 2013 at 6:13am

my particular lease they actually need to start drilling by my due date. I just find it hard to believe that they will drill all these shallow wells but who knows

Permalink Reply by Booger on November 6, 2013 at 10:40am

to date, it appears like all the permits pulled for "vertical wells ("drill new well" on database) have been in guernsey, noble, and belmont...............only permits so far for horizontal utica wells ("drill new well horizontal" on database) are the herrik well in monroe and the mizer farm well in harrison.

the vertical wells list rhinestreet/marcellus formation.

the mizer and herrik also have permits listed on the "vertical" report under trenton formation.

 

 

Permalink Reply by Gusher on November 6, 2013 at 2:29pm
I am in Harrison and they are saying they will drill if I don't sign
0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on November 6, 2013 at 5:52pm

They're saying that to a lot of people.  They can't drill everyone.  I'd ride it out if you don't have a lot of time left on your lease.

Permalink Reply by Olive Sue on November 7, 2013 at 3:07am

Wow!  May I ask what your sale defined as sold?   I  hope you became a "multi" millionaire a few times over!!!!

Permalink Reply by Gusher on November 7, 2013 at 4:42am
I plan on it as I have 3 months left, would be curiouser to hear from someone that already did ride it out.
Permalink Reply by GW3 on November 8, 2013 at 8:23am
Gusher , cant say to much but have the same experience .. Holland and eclipse were calling every week telling us to sign for 100 bucks an acre or they gonna drill.. We did not sign and are now being offered huge amount for new lease..every acreage is different so i cannot say it will work.. If i were u i would not sign.. Just look at the pipeline activity going on in our area ..we have been leasing ground on and off for the last 2 yrs .. And i can defintly tell u -- good things come to those who wait
Permalink Reply by Trekker on November 10, 2013 at 8:11am

There has been a decision in the Belmont County Court that invalidated an Oxford lease because it had a clause in it that its wells could be held forever by"production" as determined only by Oxford.  If that decision is upheld on appeal, Oxford has no way to drill a shallow well that is not really productive and hold it forever.

Old Oxford leases also have a clause that it can only combine 160 acres for a well.  Horizontal wells usually need about 640 acres.  So even if Oxford drilled a shallow well it would still need the landowners permission to combine it in 640 acres.  Eclipse is interested in horizontal wells so it will going to the landowners for permission to change the lease even if it has a vertical well on it.

The way I see it, landowners should hold out for the going price of new leases before they sign any changes or extensions.  But good advice from an experienced attorney is a necessity before signing anything. 

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