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Eastern Oregon Units opening up - Land Man offering $20 & 12.5% Please help!

  • 38 Replies
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mohawk70

  • 10592
A lot of discussion on Mr. Marx and hunting elephants because the tuskaloosa:

http://www.gohaynesvilleshale.com/group/tuscaloosamarineshale/forum/topics/goodrich-tuscaloosa-well-produces-75-000-boe-in-three-months


LOTS of stuff going on ... and not a LOT of discussion.

So ... it makes ya wonder about the Eastern Oregon "under the radar" gas thing.


[A few years back, we got to discussing some natural gas formation in ??? Montana?  ... in that area ... ANYWAY ... they drilled wells every hundred yards .... for some reason, the natural gas did not migrate by itself ... so they had to drill a LOT of wells.   We looked at the satellite photos and it was interesting how they had wells punched in so close together.]

Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

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mohawk70

  • 10592
The snail-mail paper copy of the May 2013 issue of Pipeline & Gas Journal arrived yesterday.

On page 76, there is a map of the USA from FERC, dated February 2012.

It shows a natural gas pipeline connecting central Oregon to central Washington State and two short E-W natural gas pipelines toward the western part of Oregon.   There is also a natural gas pipeline cutting diagonally across the SE tip of Oregon and another E-W natural gas pipeline across northern California.

Absolutely no idea what they are for ... except they are natural gas.

No other information in the article.

The article takes several pages ... "Infrastructure Investment Will Determine Impact of Natural Gas Boom on Economy" by Marc S. Lipschultz of KKR.

So, there is definitely something going on there in Oregon.
Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

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Berkeley


 what turned out to be the most productive shale gas production regions.  If there is no historical data about well production it of course makes it more difficult to make even the roughest of estimates of value.  Still, if companies are willing to invest in drilling, at a time of overall gas surplus and low prices, it's very likely that there is a resource of real worth in your region. [/b] In trying to get some of the neighbors to perhaps slow down and not rush for the first offer, it might be of use to point out that when signing a lease you basically are granting for a term certain important rights no matter how little the initial consideration.  In exchange for a 20 dollar an acre bonus, which I would suppose is for the standard 5 year term, the land owner might see that other opportunities for sale for an entirely different use has been diminished.   As you point out, Idaho Power (now Idacorp) has a power plant nearby.  I'm familiar with that company from owning some shares in the past, and in general they are a fairly well run electric utility.  They were a hydroelectric and coal fired company for a long time, but it looks like they are on the band wagon now of jumping from coal to gas which is part of a big national trend.

Somebody is speculating. A lot of people made a lot of money buying and flipping. Some of them were or billed themselves as oil companies. It is a crap shoot, but if i were you i would just sit tight and see what develops in the next five years. $20 an acre is not worth giving up your lottery ticket imo. Good luck and keep your ears open, your relationships with your neighbors friendly and get informed on lease language. I dont think you need to be part of a bargaining unit to get a nice payoff if interest develps in your area. I didnt. But you can benefit from bargaining that the groups do. The people in my area who got the best bonuses came after the land groups made their deal and the late comers got almost double what the groups did which in itself was in the $2500 an acrea range. Just watch and wait for a while.

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Clay

Man there's advice all over, it is such a gamble. 

Please give me input on the preferential right clause... it sure puts them in the drivers seat.  I kind of doubt they'd delete it. 

As I am pursuing negotiations currently, I plan to bargain for a 4yr paid up + a 2 year, total of 6 years, not the 8 in their standard lease.
« Last Edit: May 24, 2013, 04:12:47 PM by Clay »

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Clay

The NW pipeline goes right through this area, so the taxes on moving the gas would be much lower.  Not to sound redundant, Idaho Power put in a big plant nearby for that reason (or so I was told).  I think that aids in the speculation, maybe not.

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Clay

From what I'm gathering:
 

Warranty of Title  means I wouldn’t want to warrant marketable title for subsurface rights because I could not, at my own expense, afford to defend any claim against my land! I would expect them to reword this, am I wrong?

Preferential Right means they are in the drivers seat because they get to match any new offers toward the end of a lease. I would expect them to be firm on this???  If they are, is that bad?  As long as they're matching offers at the end it seems reasonable, but unnecessary at the same time because I'd have the leverage at that point, not them.

It won't boom for a few years so a 6 year should be comfortable enough, and I could renegotiate after that.

I appreciate the input, and need the help! 

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Berkeley

Man there's advice all over, it is such a gamble. 

Please give me input on the preferential right clause... it sure puts them in the drivers seat.  I kind of doubt they'd delete it. 

As I am pursuing negotiations currently, I plan to bargain for a 4yr paid up + a 2 year, total of 6 years, not the 8 in their standard lease.

If there is oil/gas in your area, there will be many theys making offers. At least 2-3, perhaps quite a few. Some will tailor a lease more or less for you, others will not change anything but the bonus and royalty when they bargain, unless of course you have substantial acreage. For instance, one would change nothing for me, another gave me a no surface access lease, in addition to the nice no deduction royalty clause, a pugh clause and several other niceties a nearby group had bargained for. The company that would not do diddly for me, did a lot for a family,that had about 150 acres.

Do be rushed. The first offer i got was for $900 per acre bonus and 13% with deductions and boilerplate. I settled for $2500 and 18.75 less than a year later. Some neighbors got almost double what i did a few months after that. This all happened after the oil companies had been around once two years earlier and then pulled out during the recession.

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Clay

I appreciate the input Berkely.  I'm looking at it now as under $2000 we could use right now, but beans in the big picture if they do find gas here.  The really scary part is if people are signing the leases as they are presented, they could have their land locked up for-ever if the company wants to be unscrupulous.  I'm leaning toward passing first round.

I may see if they want to do a much lighter contract and a shorter term, but just passing for right now might be a better idea.

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curt1234

go to http://msue.anr.msu.edu/program/info/oil_and_gas

that is the Michigan State University oil and gas information page for landowners
Look at the Oil and Gas Leasing video and some of the other documents (Landowner Informaiton for Oil and Gas Leasing).   Lots of informaiton for landowners.  Go slowly and learn what is in these leases!  They are one sided for the company