Landowner Rights Denied By Moratorium      NY: 6 Years, 1 Months | DRBC: 5 Years, 3 Months

Author Topic: If patience is a virtue, I am a virtuous woman!!  (Read 2523 times)

41694love

  • Posts: 246
If patience is a virtue, I am a virtuous woman!!
« on: October 06, 2013, 06:06:56 AM »
I am going to post this here and hope it doesn't get moved.  This thread has the most foot traffic and let's face it, it all comes back to who/how we all chose to lease.

For those who may not know me, I will give some background - I am in Wyoming County, PA.  Only six of my acreage is currently in a unit.  Said unit is in the East Lemon area.  I got a letter back in 2011 stating that I was in said unit.  Over that time, I have called in to CHK probably about once every 3/4 months just hoping that they would have an update.  I saw swift activity just as you would expect and lots of movement.  The pad was set up, drilled, flared, white tanks were put in place and a gate went up to keep people out.

When I would call in to CHK, I would talk to whomever answered the phone and I got answers all across the board like, "There is no gas there and that is why we aren't doing anything".  "We don't know what we are doing there".  yada, yada, yada.  Then I discovered a guy who I really clicked with and he became my go-to guy.  I liked calling in to him because even if he didn't hav a lot of answers (his answer was always "It's waiting on pipeline").  He was still very nice, friendly, and eager to talk.  I called him directly.  The last time we spoke in July, he told me (for the first time ever) that that well was set to go online by the end of this year.  When I just called him again this week, he told me the same thing - always WAITING ON PIPELINE).  I wish you could see the length of pipeline that needs to be laid, it is minimal at best.  Now, of course, my guy doesn't even know if he still has/is going to have a job soon so I don't even know if I am going to have that contact anymore.

I have tried to research and research whatever I can to find pipeline permitting.  I use rlstore.com to see the permitting in general.  I know I am not supposed to be counting on this royalty money, I know I am supposed to be happy with everything I am getting.  I know, I know all of this.  But, come on!!  I just think this is getting so ridiculous.  Here are the questions I have....what do you suppose is the hold up?  And is there a place/contact where I can find more information?

About ten minutes from my house are the Tague units, Garrison units (Chief), also 20 minutes from my house are the Cabot units (too numerous to name).  They all seem to go through the normal process of being drilled and getting online (that makes the company money, right????) so why would they not be eager to get something online?  At first I thought it was all about NG pricing but as that slowly increases, I don't think that anymore.  I am beyond frustrated and feel like I have nowhere to turn.

The rest of my acreage has been flipped to SWN and my Wyoming County Landowner Group lease with them will expire in 9/14.  A lot of my possible negotiations would be based on how well the current CHK unit is producing and I feel like I am not going to have that information before those negotiations will be starting.

I am just reaching out to all of you.  I am just hoping that I can get some answers or some guidance.  If there is nothing I can do and you tell me that, I will accept it as I trust the folks on this board.  But if there is anything, anything you can think of to help me get some info or find out what the hold up is, please let me know.  If you prefer, you can send me a PM on here.  Thanks everyone!
Yep, still waiting on pipeline....

Rockdale

  • Anties
  • Posts: 5015
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #1 on: October 06, 2013, 02:44:46 PM »
These last few years a lot of us have learned to be patient even if that is not a virtue which comes naturally.  Especially for those who own property in New York or in the DRBC region of Pennsylvania.  As to when a gas producing company gets around to making a specific well operational, I think it is important to keep in mind that at any given time there are about 1,000 to 2,000 shale gas wells in Pennsylvania that are not yet hooked up to a pipeline.  And even with that backlog Pennsylvania is now producing about 13 to 14% of total US gas production.  Read a bunch of press releases, reports by corporate management, or comments by analysts, and the fairly universal theme is that there is a lot more gas available to be sold than capacity to carry it to market.  There's more pipelines being built all the time, and existing lines are being expanded in capacity in various ways including more compression on lines, but it's still a daunting task to carry all of that volume, a problem not helped by chronically low prices.  I think the log jam will break when gas prices rise high enough.  But I don't see much prospect for a decent price rise until exports become a reality and natural gas makes a big inroad into the transportation business, especially to fuel large trucks.

Jim88

  • Posts: 368
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #2 on: October 06, 2013, 03:54:40 PM »
its a bust...
the whole gas boom in PA is done.....
they are too backed up....if you arent receiving royalties by now.....forget it.....

41694love

  • Posts: 246
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #3 on: October 06, 2013, 04:15:08 PM »
its a bust...
the whole gas boom in PA is done.....
they are too backed up....if you arent receiving royalties by now.....forget it.....

Umm, I respectfully beg to differ on this post.  The people I mentioned above are my friends, family, neighbors.  They are having their wells permitted, drilled, and going online within a very reasonable timeframe.  Many have just recently gone through the process and are receiving royalties that have allowed them to leave their jobs, pay off their debts, donate, save, travel, etc.  That was the point of my post.  It is happening all around me - within minutes of me - and it is happening in a timely manner.  I guess it comes down to who we chose to lease with. 
Yep, still waiting on pipeline....

firecutter874

  • Posts: 487
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #4 on: October 06, 2013, 04:38:22 PM »
Wow Jim 88 Gloom & Doom to say the least.  :( :( :(

Rockdale, the very little that I have observed, I agree with most if not all you have posted.

Either way it is a wait and see situation which will have for us where and when this NG play winds up.

firecutter

Samuel

  • Posts: 2365
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #5 on: October 07, 2013, 06:23:34 AM »
Let's see.  Do you have continuous drilling clause in your lease?  If so, what are the time frames?

Otherwise,  consider the upheaval at CHK these days within their ranks, their future plans in the Marcellus, and the fact that the remainder of your acreage was flipped to SWN.  Is it at all possible that the entire operation at this (your) wellsite may be turned over to SWN?  That certainly would be a separate more involved transaction and cause delays. The actual "bulk" purchase of CHK leases by SWN recently was over a year in the making.

I would bet that it has occurred within the Marcellus already....actually isn't that how the ALTA/WPX deal went down.  Weren't there Alta wells already drilled when Williams came along and purchased?  Any thoughts out there?

I just have a feeling you are the victim (poor choice of words considering the location of your property) of corporate delays and upheavals...you'll have your day.

« Last Edit: October 08, 2013, 05:36:53 AM by Samuel »

shinobi

  • Posts: 2557
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #6 on: October 07, 2013, 12:18:39 PM »
41694love

I didn't respond earlier because I didn't think my opinion would be especially helpful to you or, for that matter, be very welcome.  However, in light of your PM, here goes:

I find your situation unremarkable.

There are a number of units nearby to my land with which I'm personally familiar.  The development states of those units are "all over the map" and it's unrelated to the gas company, which is the same in all instances.  All of the units I have in mind already have pipeline.  Several are fully developed and producing gas, a couple are partially developed and producing gas, many are only partially developed and producing nothing at all (around here called "plugged" wells).  Nobody is worked up or expecting anything different given the current NG market environment.  Units without pipeline (yes, we surely have those, too) are, as you would expect, dormant.  And progress on pipeline here is glacial.

There is an absolute surfeit of natural gas.  All companies are struggling to do the best they can given a miserable market situation.  Landowners who already are receiving royalty checks are most fortunate.  Many more landowners will be receiving royalty checks in the future.  But how far into the future is anyone's guess.


Jim88

  • Posts: 368
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #7 on: October 07, 2013, 09:21:18 PM »
far far in the future........may end up being wortrh the long wait

ap

  • Posts: 693
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #8 on: October 08, 2013, 03:32:03 AM »
The gas is there, they are not going anywhere.  It may be a longer wait than I would like, but it is coming.   Demand and new uses are being increased by the day and exporting is not that far off.  Keep the faith.  ap

Rockdale

  • Anties
  • Posts: 5015
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #9 on: October 08, 2013, 04:17:27 AM »
The gas is there, they are not going anywhere.  It may be a longer wait than I would like, but it is coming.   Demand and new uses are being increased by the day and exporting is not that far off.  Keep the faith.  ap
>>>> According to the EIA website exports by pipeline to Mexico are becoming a major enterprise, an interesting turn around since until very recently imports from Mexico were growing rapidly.  And Marcellus Shale gas is so cheap that it has won some market share in eastern Canada, edging out Prairie Province production due to lower transportation costs.  We're still by the latest estimates about two years off from being able to ship out LNG from the new plant that Cheniere is building on the Louisiana coast, with the other two approved for export plants that are to be converted from import facilities on the Gulf Coast opening for business at some yet to be determined time.

orfeo27

  • Posts: 46
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #10 on: October 08, 2013, 08:02:10 PM »
When I read the Wyoming County land owner group lease is that if there are no operations by the fifth year of the lease, Chesapeake will need to re-up the lease.
Operations are spelled out in the lease as well. So that could be a nice some in the re-up payment in the meantime.
Orfeo

Countrygal

  • Posts: 756
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #11 on: October 08, 2013, 08:08:30 PM »
Oh, I am thinking there is no way in anywhere CHK (Now SWN) is going to pay $5750/acre to renew those leases. Them days be gone. 

For the acreage SWN wants, they'll either have it HBP by then, for others, they'll come back with a much lower offer on SWN paper (no more 20 page WCG lease), and the rest, they will simply let expire.

Best,
Gloom and Doom II

41694love

  • Posts: 246
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #12 on: October 09, 2013, 03:28:01 AM »
When I read the Wyoming County land owner group lease is that if there are no operations by the fifth year of the lease, Chesapeake will need to re-up the lease.
Operations are spelled out in the lease as well. So that could be a nice some in the re-up payment in the meantime.
Orfeo

Yes you are correct that this is what our existing lease says - however - SWN is a much more modest company than CHK was when it was writing out checks for millions to landowners to gobble up the leasehold.  For those leases in the group that SWN did choose to acquire, I suspect an addenda will be 'offered' or a complete lapse will take place, followed up by a re-offer.  Just my thoughts.  So, you are kind of correct.  Our lease does say that that is what we are to get - but I guess the gas co's were smarter than us and saw away around paying that out to us again.
Yep, still waiting on pipeline....

Samuel

  • Posts: 2365
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #13 on: October 09, 2013, 06:10:35 AM »
When I read the Wyoming County land owner group lease is that if there are no operations by the fifth year of the lease, Chesapeake will need to re-up the lease.
Operations are spelled out in the lease as well. So that could be a nice some in the re-up payment in the meantime.
Orfeo

Yes you are correct that this is what our existing lease says - however - SWN is a much more modest company than CHK was when it was writing out checks for millions to landowners to gobble up the leasehold.  For those leases in the group that SWN did choose to acquire, I suspect an addenda will be 'offered' or a complete lapse will take place, followed up by a re-offer.  Just my thoughts.  So, you are kind of correct.  Our lease does say that that is what we are to get - but I guess the gas co's were smarter than us and saw away around paying that out to us again.

4169-

No one saw 07-09 coming in this country.  They outsmart us a lot simply because they've been through this stuff dozens of times during the last 150 years and we don't do our due diligence...but nobody predicted the financial crisis this world experienced.

fat, dumb, and happy

I am optimistic however and.....

If you act desperate, they will treat you as such.

rfnkmk

  • Posts: 400
Re: If patience is a virtue, I am a virtuous woman!!
« Reply #14 on: October 09, 2013, 10:55:15 AM »
"If you act desperate, they will treat you as such."

Sam, I agree with your comment. Perhaps those who did get the $5750 bonus can focus on other details such as royalty and, most importantly in my mind, the details of the lease. This might be a good time for us to have a discussion of what 2-3 terms in your lease would you fight for if you had to negotiate with a stubborn son of..., I mean, stubborn SWN. Granted success would also depend on your acreage and location within the unit, but this might bring up some interesting food for thought useful to landowners facing this situation.

For instance, I might focus on deductions, royalty and separation of any pipeline rights other than the gathering line carrying my gas. What would you want to retain most?

 


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