O6DODGE

iTrader: (6)

I still thank a 22 year lease is rediculous. In my oppinion, if they had any intent to drill they would take a 3 year lease with maybe even a 2 year option and get it done in that time period.

Greed4Speed

iTrader: (7)

The well will be done long before that. The lease is the amount of time they think they can profittably get NG from that area.

O6DODGE

iTrader: (6)

The hell with that I would never sign a lease for 22 years with out some sort of clause stating that they had to produce in X amount of time or it was released. And if they are done long before that then there will still be no neeed for that long of a lease. Once production is started it can not be leased again until production has stopped and the lease has been released.

fasttagurl

iTrader: (12)

The lease says: "...shall be for a term of three (3) years from the date hereof, and for as long thereafter as oil or gas or other substances...are produced in paying quantities from the Mineral Estate." I do not like the part in bold. The rep. verbally said this would be for 20-25 years of drilling/producing but the clause implies FOREVER it seems. If they do not produce within 3 years the lease must be signed again and we get another $15,000, as stated in the Agreement. I have also asked for royalties BEFORE the minerals are processed, royalty payment no later than 60 days after the first delivery of minerals, and to add "Lessee shall not cause any explosions or eruptions to occur during the drilling operation, and any such occurence which leads to damage of the land or property shall be covered by Lessee entirely." Also, there is a "Statement of Fact Form", which says if they find these rights belong to someone else, we have to pay back the money. I have asked they have a period of 30 days to find this out, because once spent I WILL NOT be able to pay this amount of money back!

O6DODGE

iTrader: (6)

Now here is where a good attorney would come in and delete that clause and put one in that says something along these lines. If the Oil company comes to find they maid a mistake in title it is there loss and no money is to be returned.

It is the responsobilty of the land man to be positive that your the correct owner of the minerals. If not they will ask you to sign a ratification clearing you of the minerals but as long as you have deleted the clause you will keep the money and the landman would probably loose his job. LOL

O6DODGE

iTrader: (6)

Also it is true once the start production they will hold the rights to your minerals until production has stopped.

Greed4Speed

iTrader: (7)

Be realistic. It isn't like they can just suck out all the gas down there in a specified time. It costs millions to get a well up and going. They have to recoup their costs then make a profit.

I don't see what the problem is. You're getting money for doing nothing.

91Z28

I know about the shelf, the buzz around work right now is that there is a lot of coring going on in the shale around the Appalachians and the drilling there will be much more profitable than the Barnett. I wish I had enough $$$ to invest in a few certain oil companies right now........

jmorgan

iTrader: (3)

If it is 15k for the lease that would be fine, if you are getting royalties from what is produced. They hold the rights as long as the well is producing (which means you are getting a paycheck if you have royalties, so really the longer it produces the better it is for you, gas wells dont produce for 20 years and that is what they produce out of the barnett shale)

I dont think there would be much subsidence from the production but there could be some and could cause cracks in your house and foundation. I would try to get something added about them paying for any damages from subsidence for at least the time you plan to own the home if you can.

jmorgan

iTrader: (3)

Its not a shelf, you dont get a large buildup of shale on the shelf, you get it deep water offshore hence why it is called the Fortworth Basin

91Z28

I was just calling it what he was, I should have put it in quotes. I know it is commonly referred to as "The Barnett Shale".

O6DODGE

iTrader: (6)

Yes they can. If they are really interested in the area, they can do what ever it take to get a well up in a reasonable amount of time. I work in the buisness and when we take a lease it is for 3 years with a 2 year option and if that is our hot spot we have our well up and producing in the first 3 years. NOw once its producing then yes the lease is held by the oil company. It could take 20 years or even 1 year for it to run dry but once its producing your getting paid.

On a side note I did a little askin around at work today and $15k is the going rate on minerals in the shale. So I would jump all over it and sign a 3 year lease for that price.

Greed4Speed

iTrader: (7)

They can get the WELL up in a certain amount of time once they start, but they can't get gas out in a given amount of time. There is no guarantee how much a well will produce. They are also drilling like mad around here and just because they may want to drill in an area quickly doesn't mean they will be able to. You never know what will happen to slow everything down.


If you work in the industry you'd think you would understand that better. So what do you do exactly?

Greed4Speed

iTrader: (7)

They're not OIL companies either. Oil companies deal with crude. This is natural gas we're talking about.

91Z28

I should have said drilling companies then, you've got me there. I've heard BHI is already setting up in Pennsylvania, I'm sure there are others that I haven't gotten wind of. I'm used to the Gulf Coast being the main game in town as far as energy goes, it'll be strange if the Appalachians get to be extremely active.l

O6DODGE

iTrader: (6)

That is what I said. If you go and read all of it I stated that "once the well is producing it could produce for 20 year or it could go dry in 1 year."

I do they same thing that the person that knocked on her door and asked for the lease does. I am a Petroleum Landman.

Greed4Speed

iTrader: (7)

My bad... I was reading it differently as in they had to finish production in 3 years. I just couldn't see that happening.

O6DODGE

iTrader: (6)

Its cool didnt mean to get in a pissing match with you either. Yea there is no way to know how long it will take to complete production.

SPEEDYws6

iTrader: (9)

What are some of the major stimulation companies in that area? Halliburton? Schlumburger? BJ? Any of those?

91Z28

As far as directional work goes Crescent, Ryan, and Leam are extremely active there.