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Permalink Reply by Philip Brutz on October 2, 2014 at 10:42pm

Almost always the old leases hold all of the geological strata.  Read the exact wording of the lease.

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Permalink Reply by Gunner Ostergard on October 3, 2014 at 3:02am

Phillip is right,  read the lease and see if is specifies how deep the gas rights are that are being leased.  But double check to see if it really is HBP.  Does your state have the well listed and the production listed for every year after the well was drilled.  Did the leaseholder consistantly receive royalty payments for the well?  Are you certain the free gas at the "mansion house"  is really coming from that well?  Could it be back fed from the main line?  When that much money is at stake sometimes people lie,  so just make sure that old well is really producing.

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Permalink Reply by Jim Litwinowicz on October 3, 2014 at 3:03am

You have to read your lease.  Unless it specifies and limits what strata are leased or lists depth limitations, the lease will hold all strata all the way to the center of the earth.

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Permalink Reply by william r rinehart on October 3, 2014 at 4:49am

Most likely held by an old boiler plate lease, which means its always producing :-).

The production numbers are supplied by the driller, they are not audited by the state.

I have talked to a lawyer and to fight anything in court, price tag is $10,000 becuase the driller will lawyer up, lots of money riding on him keeping the rights to the property, besdies I hear between $8,000 to $12, 0000 to cap it.

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Permalink Reply by Gunner Ostergard on October 3, 2014 at 5:22am

I heard that it is more like $40,000 to cap but there is no reason that a landowner or leaseholder would be responsible for that UNLESS they agree to be the owner/operator of the well.  And I agree with you,  you better believe the the shallow well gas company will lawyer up, and if you have 5 or 10 acres it may not be worth it.  If you have 50,100 or 200 acres it may very well be worth it.  One other thing worth mentioning,  most older shallow well leases do not include a unitization clause which the Marcellus/Utica developers require in their lease.  ( unless you own hundreds of acres where they could make one unit out of your property)  so even if the old well really is still producing,  the Marcellus/Utica developers can not use the old lease unless you sign off on the unitization clause.  Any anytime anyone ever asks for your signature,  it is worth money.  As much money as you possibly can ask for.

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