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cross unit drilling agreements with chk

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aubrey

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cross unit drilling agreements with chk
« on: February 16, 2018, 02:59:13 PM »
I just saw one of these agreements. doesn't look like anything I would sign without modification.

are many folks getting these from chk?

wj
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Re: cross unit drilling agreements with chk
« Reply #1 on: February 16, 2018, 05:25:33 PM »
How about some more descriptive info?  Sounds interesting but I have no idea what you're discussing.

Are you talking about longer laterals running across multiple existing units?

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macal

  • 10516
Re: cross unit drilling agreements with chk
« Reply #2 on: February 17, 2018, 08:22:05 AM »



  Cabot has started doing the multi unit laterals just recently.
  They have requested written permission from landowners but I was told that they could do it without thr permission.
  I am wondering if this is a totally new concept or has it been done elsewhere previously. They want want the long laterals for efficiency and cost savings.Dont blame them. I signed off without any demands. Hope the wells turn out good. 12,000 feet out and 8,000 feet down. Engineering feat.


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shinobi

  • 4297
Re: cross unit drilling agreements with chk
« Reply #3 on: February 17, 2018, 08:33:19 AM »
How about some more descriptive info?  Sounds interesting but I have no idea what you're discussing.

Are you talking about longer laterals running across multiple existing units?

Not a new concept.  See my post here from almost three years ago:

http://www.naturalgasforums.com/smf/index.php?topic=23900.0

Pay heed to Cara's posts and prediction.

This is nearly six years old:

http://newsok.com/article/3654187
« Last Edit: February 17, 2018, 08:42:29 AM by shinobi »

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macal

  • 10516
Re: cross unit drilling agreements with chk
« Reply #4 on: February 17, 2018, 09:03:04 AM »



    Thanks Shin and Cara. I have trust in Cabot. But who knows.


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aubrey

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Re: cross unit drilling agreements with chk
« Reply #6 on: February 17, 2018, 09:55:09 AM »
How about some more descriptive info?  Sounds interesting but I have no idea what you're discussing.

Are you talking about longer laterals running across multiple existing units?

yes. the Marcellus wells that chk is permitted for drilling this year include 10-12,000 footers, that cross several units.

the advantages for chk are obvious...lower costs. the advantages for us are a little harder to see.

one thing that I find interesting about the agreements as presented is, that they clearly state that under current pa. law, they can drill them without consent. I think the reason is because there is currently nothing in the law that addresses the issue. sound familiar? without any language in current law defining the practice, whatever they get us to agree to now, cannot be changed if laws are crafted later. (impairment of contracts clause would apply, just like the deductions issue)

of course chk includes a little coercion in a separate letter that comes with the agreement. that letter gives examples of how it could, but not necessarily would work for us. also in that letter it states that chk would probably be drilling these wells in units where they have signed agreements first.

really? if they do not need an agreement, why would they drill where they have them first? why seek the agreements at all?

this kinda reminds me of when landmen were desperate for signed leases, and more than a few of us heard the line that "if you don't sign, we'll just take the gas and won't have to pay you anything for it".  slaplaugh I love a good laugh!

wj
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macal

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Re: cross unit drilling agreements with chk
« Reply #7 on: February 17, 2018, 10:38:19 AM »



  I would not sign an agreement with Chesapeake on the family property at least until all this deduction stuff is resolved.

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macal

  • 10516
Re: cross unit drilling agreements with chk
« Reply #8 on: February 17, 2018, 11:15:48 AM »



  They haven't asked. Chief is the Driller.

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ghrit

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  • Member since October 05, 2008
Re: cross unit drilling agreements with chk
« Reply #9 on: February 17, 2018, 12:09:47 PM »

this kinda reminds me of when landmen were desperate for signed leases, and more than a few of us heard the line that "if you don't sign, we'll just take the gas and won't have to pay you anything for it".  slaplaugh I love a good laugh!

wj
At least one landman lost his job for that threat.  Yes, I KNOW this.
There are two kinds of ships.  Submarines and targets.
www.survivalmonkey.com

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aubrey

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Re: cross unit drilling agreements with chk
« Reply #10 on: February 17, 2018, 02:10:39 PM »
How about some more descriptive info?  Sounds interesting but I have no idea what you're discussing.

Are you talking about longer laterals running across multiple existing units?


the advantages for chk are obvious...lower costs. the advantages for us are a little harder to see.


I'm still thinking this through.

aside from lower costs, there is a way under this agreement for chk (or any company) to squeeze a little extra revenue for themselves, by lowering the royalty share of some landowners involved in these wells.

jumping ahead now, just as back in the days of leasing, I think landowners should head this screwing off at the pass. years ago, I urged landowners to get in touch with their legislators to pass laws that would protect us from potential unscrupulous business practices. nothing happened, and now we have the deduction issue. this issue needs legislation now, or it could end up the same way.

forewarned is forearmed. I would not sign this agreement at all, but I will be in touch with my legislators.

wj
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Steve-O

  • 2505
Re: cross unit drilling agreements with chk
« Reply #11 on: February 17, 2018, 05:41:13 PM »
Excellent visuals that may help one better understand this concept...

http://iogcc.ok.gov/Websites/iogcc/images/2011BuffaloPresentations/LegalReg-Wrotenbery2.pdf

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riverrat

  • 1978
Re: cross unit drilling agreements with chk
« Reply #12 on: February 17, 2018, 05:59:32 PM »
wj are those wells spread around Bradford our one general area   thing are really busy on this side of the river  mostly fracking I think         a lot of sand & water

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aubrey

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Re: cross unit drilling agreements with chk
« Reply #13 on: February 17, 2018, 07:33:20 PM »
yeah, they're frac'ing up the hill from you. they're hauling water from here to over there 24/7.

I've only seen new permits for my side of the river so far. there's a coupla regular ones, but a bunch of cross units. it looks like they're avoiding high royalty average units for now.

wj
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aubrey

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Re: cross unit drilling agreements with chk
« Reply #14 on: February 17, 2018, 07:47:18 PM »
Excellent visuals that may help one better understand this concept...

http://iogcc.ok.gov/Websites/iogcc/images/2011BuffaloPresentations/LegalReg-Wrotenbery2.pdf

here's the problem...

"The default allocation is a proration between the units based upon the feet of perforations in each of the units." that's from one of the slides, and almost the same language is in the chk agreement. that language opens the door for chk to steamroll us harder than with excessive deductions.

wj
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