Replies to This Discussion

Permalink Reply by Michael Karpiak on December 9, 2010 at 4:09pm

the only problem with that Brian is even though they put stakes in the ground and declared a unit.....they are way behind in getting the permits in......and until the permit is recorded....there will not be a record of that unit......BUT East Resources office does give out a number in pittsburgh to see if your in a unit or not. We did not sign with east. We are signed with EQT. The guy who marked off a well pad on our neighbors property said our land is in a unit but cant be drilled unless a deal is made with EQT.  East said they might wait on the H legs going under or property or just drill around us. When we went down to the courthouse in Wellsboro they didnt have any record of it because the permits are behind.

Permalink Reply by Brian V. on December 9, 2010 at 4:27pm

Wow!! Interesting! I would imagine EQT and East would work out a deal so that your minerals are developed. Your lease would be of no value to EQT it you technically are in a unit and having your minerals produced. I have no idea how that works. It seems like the DEP or who ever approves the well permit would have to ensure that all acreage under lease within that unit would be compensated. Someone has to be approving these units. 

Permalink Reply by Lynn Wigglesworth on December 11, 2010 at 1:53am

East can't drill under a property that they haven't leased or made a deal with the company that HAS leased it. East doesn't always plan ahead; they've drilled vertical wells before they leased the land they need to finish the horizontals. If an unleased property is in the way of a horizontal, they either have to go around that property or stop the well short. Or try to get the lease.

Permalink Reply by Ann Ticopa on December 9, 2010 at 5:37pm

You can find out if a permit has been applied for at the PaDEP efacts website:

http://www.ahs2.dep.state.pa.us/eFACTSWeb/criteria_sitesbymuni.aspx

(Select Tioga County and then your Municipality). 

 

 

Permalink Reply by Lynn Wigglesworth on December 9, 2010 at 9:07am

I've heard that it's East's plan to put horizontals in both directions (usually NW/SE) from a wellpad. It makes sense to make the most use possible of each pad.

Permalink Reply by David Stewart on December 10, 2010 at 12:50am

The unit maps are available at courthouse or by loading Landex remote on your computer.  You pay landex per minute used, 20 cents per minute for Tioga county.  You have to set up an account and add money to it first.  The maps are also available at the courthouse on their computers but it costs 25 cents per page to print.  Seach for Declarations under the document type.  They will specify which properties, owners, acreage are involved and have a map attached.  Really interesting to look at the shapes of these.  The early ones which were declared and drilled first are more or less rectangles running NW to SE with the well in the center.  This is where the drilling company had most of the leases tied up in the area -Check out Jackson twp near the NY border- Later the unit shape andsize get really bizarre in some cases.  Clearly the drilling companies are using the rule of capture to thier advantage.  In some cases there are properties in the middle of the units not included.  Sometime s the drill site is just at one end and the unit size is considerably smaller than 640 acres. 

 

I think in most cases these units have been filed just to hold leases by production and the wells drilled are not yet producing, just vertical wells with no horizontal legs at all.  Before they start drilling horizontal they will propably try to aquire more leases and form a better unit to maximize their area and minimize drilling expense.

 

There may not be units filed yet, even if drilling is started, if there is no immediate need to hold any leases.  They will file a unit before production starts though. 

Permalink Reply by Brian Day on December 10, 2010 at 3:45am

You mention units that are long and rectangular with the well at one end.  Do any of these units have additional corresponding units running in the opposite direction with the same well pad overlapped?  In this way, a drilling company could hold nearly 1200 acres with two units off of the same single vertical well, instead of 640 acres.  I don't know if this would be allowed and was wondering if it had already been tried.  As for "islands" of land under a different drilling company within a unit set up by a gas company, I would imagine that a deal would be struck between the two companies and probably the terms of the lease for the island would be satisfied by the surrounding lease holder.  Some small profit or trade would be realized by the 'island" holding company, but the land holder would not notice a difference, except in quality of dealings with his/her new company.  This is only a guess.  A lease is legaly binding between the land owner and the "island" company and must be honored.  I suppose that it could be surrendered back to the land owner, but it has value to the "island" company and good business sense would say trade or sell it for some value, instead of releasing the land rights back to the uncertain whimes of the land owner.

Permalink Reply by David Stewart on December 10, 2010 at 4:28pm

The units I have seen with the well at one end have been smaller units, 300 acres or less, I have not seen any laid out opposite them.  My parents just had one laid out next to them in Middlebury, the others seem to be isoloated also.  Several industry people I have talked with don't really think the smaller units will be profitable for the companies to drill and they expect they will modify the size of the units before production begins.  Right now they are just done to try to hold leases.

 

That brings into play the question about t using the same pad to lay out a well in the other direction.  Seems like if the gas companies thought they could do it they would.  I think including the same acreage in two different production units for the same gas formation is a no no.  Seems like the other members of each unit would have something to say about that.  Not sure but just havent seen an instance of it yet. 

 

 

 

 

 

 

Permalink Reply by Ann Ticopa on December 10, 2010 at 5:05am

Thanks for the info about Landex Remote.  Unfortunately, their client software is only for computers running MS Windows.  Also, while I'm ok with the $25 minimum fee, the $0.20/minute access charge could add up for those of us stuck with dialup.  But the good news is that - now I know that a "Declaration" is what to look for - they appear to be available through the webstore too.  (Except of course, the one in particular I'm looking for appears not have been recorded.) 

Permalink Reply by Brian V. on December 10, 2010 at 6:18am

Sometime next week, weather permitting, I am going to make a trip to Wellsboro and try to get copies of as many Declorations of Pooling I can find. Does anyone know if there is a way I could post a few here at this site or if I would even be allowed to post them?

 

From what I've read each unit can have upto 6 separate wells on one pad with 6 separate permits filed for each horizontal so I'm not sure what I should be pulling. This could get interesting. Either way we should get a good look at what these wells look like. Any requests? 

Permalink Reply by Brian V. on December 16, 2010 at 6:36am

Sooooo, I took a look at some declarations of unitization and found something that I believe PA needs to change about this permit and unitization process.

 

Most units range from 550-640 acres. However, each declaration is for one horizontal well bore. Each well bore is filed seperately for each unit. So basically the comapny can file this document fo one well bore which travels from the center of the unit to say the north and hold all other acreage despite no well bore even remotely close to their parcel. There seems to be no time table for filing and drilling the other 5 horizontals. It is obvious to me what is going on here. Why isn't this being looked at by the DEP or our legislators? For this gas to be harvested properly at least six wells need to be drilled. The drillers are IMO allowed to drill one well and hold hundreds of acreage under this format. I understand why they would want this but it is not a good practice or even fair IMO. Looking at where they are filed shows that ERI and now ERM is most stratigectly placing these in area where leases are do to expire soon. It's legal but incredibly flawed 

Permalink Reply by Lynn Wigglesworth on December 16, 2010 at 7:36am

They can, and do, hold that sized unit with a single vertical well. If you look at the interview with the President of Shell that Josie posted, he admits that holding by (non) production is their strategy.  He admits that they are drilling to hold leases and NOT to produce at the moment. They are looking at 18 month to 2 year time frame, but he doesn't say what happens then...is that how long it will take to get all the leased land held? Will they re-evaluate then? Will they start production then? Who knows. That's why I'm pushing to get as much up-front money as I can; it could be many years before we see any royalties.

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