Mineral Owner Frustrations: What are they?

I'm trying to get a sense for where the mineral owning community is today in terms of what are their frustrations and what are their needs?

Are these evolving or have they stayed essentially the same? I know there are the issues that remain the same, i.e. Royalty deductions etc, but what else is on your radar and what would you change? Either post below or email me at keith@shaleforum.com.

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Permalink Reply by Paul Heckbert on September 15, 2017 at 12:08pm

What effects are people seeing on noise, air quality, water quality, and road traffic during drilling, fracking, and later phases?

Permalink Reply by Ty Hansen on September 15, 2017 at 12:30pm

Noise and traffic will occur during the short drilling phase and then they put the land back better then before. Sometimes they put in access roads around wood lines which are very convenient for the land owner. Inconveniences are temporary and the whole process generates necessary income for the landowner, townships, and the state! It's a win - win situation.

Barbara

Permalink Reply by Lori Huber on September 16, 2017 at 1:56am

Have to agree whole heartedly. Our unit well pad went in in 2015 and during the pad prep there was some construction traffic which was no worse than someone building a house and they kept noise and road mess to a minimum. There was truck traffic during the drilling period (about 3 mos) but roads were swept every single day and they actually repaved them when the job was completed at their own expense, leaving no noticeable footprint of a gas well even there other than the access road and gate to it. Occasional tanker trucks come and go but in general, the area is much improved with the addition of the unit and well pad.

Permalink Reply by Jeff Kerr on September 15, 2017 at 12:17pm

Well the only thing I have too say is with EQT  buying out Rice ( if it happens )  its going to make it hard to get a fair price now that the competition is gone. I have Rice now and so far I am ok  with them. Rice gave me a fair price (BONUS) and a better than average lease. I dealt with  Mike @ BOP Land Service A very good land man as I have read about others not being very good. all and all happy with Rice not perfect but not bad ether. I can't wait for the electric co. to all be gas fired it may help us all.  as long as the Gov. stays out of it.   

Permalink Reply by Lori Huber on September 16, 2017 at 1:59am

Feeling the same here. Rice has been wonderful to deal with and we have been very happy with their devotion to customer svc. Noticed some chgs once they went public and had to deal with a board, and now this sale to the larger company... we are concerned, at the very least. Know our lease terms are written in stone so not worried about that BUT agree with you on marketing and am not expecting the great customer svc for landowners we've been used to. It IS going through, BTW. Closing is set for end of Oct or Nov. Just spoke to Rice.

Permalink Reply by Darlene Nelson on September 16, 2017 at 1:57am

     We are just coming out of a 10 yr mineral lease. 4 different companies and no rental checks for last 2 yrs. Never drilled. Landman came around wanting to lease the land. Lawyer gets 100.00 an acre to negotiate a lease. Would a lawyer really help us avoid being jerked around by the oil company?

Permalink Reply by Keith Mauck (Site Publisher) on September 16, 2017 at 8:37am

I believe in paying attorneys a flat fee to provide document review and advice. $100 per could get costly if you have many acres. On the other hand if you have a small tract, it might be beneficial to pay that way. If you are unfamiliar with mineral contracts, I definitely recommend having it legally reviewed by an experienced mineral law attorney.

Permalink Reply by James Lindstrom on September 17, 2017 at 12:11am

I have 27 acres in Greene County, PA, Center Township. Currently being drilled. Sixteen wells permitted, 10 drilled so far as I know. Currently no royalty income, but two lease bonuses and one renewal have been good. 

My main concern is probably the same as anyone else: will I see any royalty money at all, or will they glom all of it for "production and transportation"?

Permalink Reply by farmgas on September 18, 2017 at 2:29am

Looking forward to the future with Consol CNX Gas, and being in one of their units in Central PA.   How are they to work with?   Are they as difficult to work with as described by other respondents in this post for their gas companies?

Permalink Reply by farmgas on September 19, 2017 at 9:19am

Doesn`t anyone have experience with Consol CNX GAS?   Are there any issues to share or not?   I`m hoping they are not going to follow the path you all describe in landowner/royalty owner relationships with other gas companies. 

Permalink Reply by Frank on September 18, 2017 at 2:13pm
The Rex deductions are pretty steep. Now wishing I had gotten lower % with no deduction...
Permalink Reply by Leo S on September 19, 2017 at 2:30pm

Just sharing my thoughts from here in Tyler County, WV

1) As frequently mentioned, price determination is not transparent and verifiable.  It needs to be mapped to public indexes or set to a hard,  defined price regardless of market price

2) Fear of forced pooling.  I am tired of the idiot WV legislature trying to pass a forced pooling bill year after year for what now is many attempts.  It has been an extreme waste of tax payer funds that could be put to better use.  Instead, the legislature and governor should pass a bill that permanently bans forced pooling (I want to know why this has not been introduced to date).  Any organization that supports criminal and unethical corporate benefits and needs through legislation needs to resign.  It is a guarantee the state will not pass any legislature, that in effect becomes a binding legal contract harmful to the mineral owner, where an astute attorney who represents a mineral owner would approve.  It is just plain wrong.

3) Fear of drilling in the Upper Devonian / Utica shales while the Marcellus shale deposits are not fully exploited and developed.  In WV the Marcellus and Utica shale deposits are very rich.  However, it is believed gas companies want to hold their Marcellus shale leases via a single or minimal number of wells, then force pool all mineral owners to drill and hold the Upper Devonian / Utica shale deposits.  I do not wish to be forced into a lease for a new shale deposit when the currently operating company performs so poorly with my current lease.  Why should I get exploited twice?  And I want to be certain all my Marcellus minerals are fully developed before I allow any company to begin on my other mineral holdings

4) My neighbor waited 18 months after the well went into production for their 1st royalty payment, and this occurred only after a notice of termination of lease was sent to the company.  This also occurred to me except I sent my notice much earlier.

5) WV / state severance tax policy; in a simply greedy attempt to gain more money, the state levied a well tax upon mineral owners.  The calculation used to define the well tax is not made available to the public, even though the state defined the algorithm to determine an owner's tax liability. The algorithm is based on one's acreage, the estimated price of coming produced minerals over time, and the estimated production value of the well over time.  The tax is NOT based on what royalty income was received for the year.  It is not possible to argue to the tax department the tax formula for one's liability because the tax department will refuse (I tried and verified this) to provide the acreage that is yours that is included in the wells, or the price and estimated production potential of the wells (considered corporate confidiential, but in reality, this information could be used to compare to prices used in royalty calculations, so the gas companies do not want it made public even though it provided the information to the tax department).  Noone without an expensive legal process can get the information to even see if the math for one's taxes was done correctly.  Frustratingly, it is not possible to complain to the state's attorney general as they refuse to bring a case against a sister organization within the state.  Now, if the gas company shuts in the well for a year, the tax liability remains the same because, again, it is based on a price and future production estimate.  It is possible to have a greater tax liability than royalty income (in fact, this is true for me).  If one thinks about this in another way, the state of WV has a maximum tax rate for its highest income earners.  This well tax that is levied makes lower income earners have a higher net tax rate than even the highest income earners' tax rates, and the well tax takes monies away from these household's ability to provide for health care, education, and retirement needs.

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