Natural Gas Wells

[tommu56]

Andy
I was called about a lease for my property in lycoming county but they never left any info to contact them and they didnt call back.

They did drill 2 test wells between 287 and 44 above Jersey Shore I don't know how they did.

The drilling co made some of the forrestry and township dirt roads wider and smothed out some of the hard turns.

tom

 

[cup149]

Around here, Armstrong Co, PA, they have drilled many wells in the last two years. Cleanup isn't perfect, and sometimes they leave the trees and brush that is pushed over when running the gas lines. And there are the dirt roads needed to access the wells, not exactly pretty. The drilling only takes a few days, so the noise isn't much of a problem. There can be some odor from leaking mercaptan or oil that collects in the tank. Just last week in Dayton, an older woman had gas bubbling out of her yard. Turns out a well being drilled nearby caused gas to travel to a porous sandstone layer, making it's way to two old gas wells, then to the surface. Get every detail in writing and keep a close eye on them.

 

[chh]

Here in Oklahoma 3 years is a common lease term. I personally prefer 2 year leases and offer an option to renew for 1 year at the same price(if the don't drill you get paid twice for 1 lease ) Anything over a 3 year lease would be at a premium price. Current leases are running in the $300 to $400 an acre range. Leases do NOT automatically renew unless you sign for that option in the contract. Setback from buildings, use of roads, feilds you want avoided, and % mineral interest paid are all negotiable items. If you are concerned about something bring it up, if they want the lease bad enough the will work with you. Watch the mineral interest clause, many companies want to pay 1/8, but will pay 3/16 if you push a little. So far I have had very little trouble with site cleanup. Most companies don't want the hassle of messing with a mad landowner so they do a pretty good job.
Are they drilling deep wells or for shallow coal(methane) gas? If the primary focus is shallow you can also put in a depth clause for depths deeper than that to keep deeper depths open for a later lease.
If you have any questions on a lease, it would pay to consult an attorney before signing. Your state laws may have some differences. Talk to your neighbors in the same section and negotiate as a group if you can or at least keep tabs on what everyone else thinks. Of course somebody will always get anxious for the money and sign first. Usually then that sort of sets the price for your section or area because they have a solid number to work from then. If you don't sign you can get "pooled" so the company can drill anyway.
On payment they usually pay the lease payment by draft. 30 business days is common. My last lease I negotiated a 10 day draft for payment. I have also been paid by check, but it isn't really any faster that a draft in most instances.
BTW, if they don't want to negotiate the roads and setbacks ect.. and say that they will handle that when they drill when they are negotiating damages, don't believe them. Damages is a seperate negotiation and property concerns need to be in the lease. If they are in the lease then they must follow the lease terms or pay enough $$$ to satisfy you to do something else in the damage phase.
Most of the stuff people scream about on eviromental damage is just BS anymore. In the early 1900's most of the bad stuff happened and went on regularly. Anymore there are enough regulations to keep things in check. Now if we could get the envirowackos to shut up about some of this they could actually drill the North Slope in Alaska and then we wouldn't be giving all our $$ to the middle east and Hugo Chavez.


Good Luck.

 

[TheHammer]

I haven't been approached yet, and I really don't know whether or not I would lease my property. I can't decide until I see the terms of the contracts for myself and consult an attorney who is well-versed in these types of leases.

I did notice some in the community have formed an organization opposing these leases. That's fine, but what disappoints me is the propaganda. Yesterday, I saw a large newspaper ad that listed all kinds of nasty things that would happen if you were to lease your property, like your well water will be contaminated by poisonous chenmicals, the PA Dept. of Environmental Protection cannot regulate these companies, etc. It just seems like scare tactics. Landowners shouldn't take the word of either side, and really need to do their own homework.

 

[EastTexFrank]

chh, that was a great reply. The thing that you allude to but don't specify is that just about everything is negotiable and that the oil & gas companies have a lot more experience negotiating these leases than the average landowner. So, if you are in any doubt what-so-ever, contact a lawyer. It could be money well spent as the amount of cash involved down the road could be substantial. The difference between 1/8 and 3/16 royalties doesn't sound like all that much but over the next 10, 20 or 50 years you could be talking about real money. My wife's family still have a few leases producing today that were drilled back in the 40's. Think long term.

By the way, I couldn't agree with you more about the envirowackos.

 

[ToadHill]

I signed a lease several years ago and when they sent the lease agreement to me, I sent it back with VOID all over it and sent a copy of my lease agreement. I had my lawyer draw up the lease as an exact duplicate of the leases the state signs with these companies when they deal with them.

They came back and said I had to sign their lease, I answered that if they read my lease they would see it was the same as they had signed in many cases with the state.

They must have decided it was "ok" because they signed it and sent it back about a week later.

 

[pennwalk]

I am not too good at searching but I seem to remember a thread about drilling wells where the poster wasn't too happy. Can anyone find it?

Chris

 

[Ken]

When the area I live in the Fayetteville Shell locations the first thing that happened were papers to lease the mineral rights for a listed amount. This was by a group wanting to lease a section of mineral acres. or you could list what you desired.
This lease covered mineral rights and not Surface rights to the property.
After the leases were purchased then the Drilling contractors would contact the area owners where drilling was to be placed. The site would be prepared and pipeline easement was shown and this was paid for to cover disturbed area. When drilling started the first bore was to a depth below water depth. then concrete was forced from bottom of bore pipe to surface so no leakage of water into or drilling fluid out of well. site then another drill rig rebored to well depth of gas production area.again another pipe was cemented in place.
A third specialized rig drilled horizontal lines for approximate 1 mile in the shale formation.
Then with water and sand cracked the shale and perferated the line to extract the gas.
All this takes about 3 months to complete . Then everything is removed except the pad area and metering and control valves couple of water storage tanks.
If You don't want a well on your property but have leased the property for gas they will work with you or drill on adjoining land.and pay your portion of mineral rights to you.
Nothing can be done until the well is properly applied for by the State gas Commission that issues a drilling permit.
All the complants come from those who haven't any mineral rights.
(so far have 14 wells under my property not a rock has been disturbed) on the surface.
Again nothing will or can be done with out surface owners agreement. Road or pipe easement is paid for by the foot length.
ken

 

[jinjimbob]

You won't know if the water wells have been poisoned for many years. After your children have all these new medical problems, you'll then wish you'd not got a little bit of money for gambling with their health. Money makes people blind.

 

[Kal130]

I think the documentary "gasland" is about this. It's currently up for an Oscar. Haven't seen it though.