lease and renogations of lease

I signed a lease a couple of years ago,of course for very little money, now that all of the disscussions of horizontal drilling etc. etc. i re-read my lease to my suprise i feel that the (small) company that i signed with knew of the haynesvilleshale at the time but did not disclose this to me. Now they are putting in small low producing wells all around me to lock up the area so the BIG BOYS cannot drill any where close to the small wells and section lines etc.etc. I really feel that the small company should be more ethical in their dealings with the public, I know that I will not feel comfortable with them in the future because I feel they took advantage of me and several others in my area. Please any comments or suggestions would greatly be appreciated...

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Permalink Reply by Grillin' - MmmMmm on September 30, 2008 at 6:55
Bob, I've been severely crucified for sayin gthe same thing on a few occassions, so watch out!!

In the end, no company has to tell you what they are drilling for or what they know. But, the mineral owner holds the trump card as he can decide not to lease or to only lease certain depths. But implying that a company was devious because they didn't tell you about the Haynesville, IMO, is just not going to gain any ground. But you know, that's why there are 100,000,000,000 lawyers in this country!! For a fee, they can help sort it out.

Oh well, now that most O&G companies have lost 50% of their value, I'm sure folks will be willing to reimburse them for some of the excess payments! Most drilling is going to be slowed down where possible. HS least impacted as a lot of the land is under lease for only 3 years so they have to hurry up. But other areas that are HBP will be slowed to a crawl. So instead of seeing those 6-8 wells per unit over the next 3 years, I would expect to only see one well that will hold the unit, while the drilling money is spread very thin across the whole area. That's why CHK is shutting in production and dropping rigs.
Permalink Reply by insomniacnla on September 30, 2008 at 7:07
You are right KB.

CHK CEO stated that although they are "laying down" a portion of their rigs in other areas and shutting in production for some of their wells in OK (as they have done in the fall for the past 3 years) that CHK is continuing their "ramp up" for the Haynesville and that "The Haynesville still looks great".
Permalink Reply by Grillin' - MmmMmm on September 30, 2008 at 14:44
Agreed. That's why I said "HS least impacted". They can't slow down too much in the HS as they have those overpriced leases that expire in a few years. They'd have to go back and have to pay additional bonus money if they let them expire. So they let the other areas slow down once they are HBP. But I really believe you will see a slow down in the rate the wells are drilled once they get areas HBP in the HS but it won't be huge slowdown and it will only be until prices go back up. Each year they've done this they've come back with more rigs and more wells. So lets see and hope!!
Permalink Reply by Leslie on September 28, 2008 at 14:57
You can hook up with a large company like chk.com
1. They are taking back up leases
2. If that original company lease is own you can take a back lease from a large
company and get a small payment and the rest when your contract is up
3. Then at the end of the contract you get the rest of the money
4.The bonus is based on your address and how much land you have
5. If you go to chk.com
you goto resources and the button for royalty assoc or something like that
has educational classes on how to do a lot of the things you need to know
6 stonewall is hot bossier is hot there are a lot of areas near shreveport they are doing the drilling
horizontal
7 there are only two companies that have the sesmic equip needed for the horizontal drilli ng
dont be fooled honey
Permalink Reply by Bob on September 29, 2008 at 2:47
What in the world are you talking about?

1 What is a backup lease....?

2 Are you talking about a top lease? You aren't making any sense.

3 ?

7 Do you even know what you are saying? Companies hire a 3rd party to do seismic. Seismic is the same whether you are doing vert or horizontal drilling.

If you listen to people like this you will get yourself into trouble.
Permalink Reply by The_Baron on September 29, 2008 at 8:48
Thank you Bob. The amount of misinformation on this site is amazing.
Permalink Reply by Kassi on September 29, 2008 at 13:18
Leslie, If I may make a few observations.
1. What exactly do you speak of when you mention a back up lease. I have never seen such wording.
2. Do you mean the original company can flip the lease to the larger company? Or are you speaking of the smaller company becoming a working interest partner with the larger company or assigning the lease but maintaining an overriding royalty?
3. Are you speaking of a top lease situation? Typically a company will top lease as a form of insurance only when there is no drilling to hold the lease and they are not sure they will be able to drill in time to hold the lease. In these cases the company typically pays 25% of the top lease sign on bonus at the signing and will pay the other 75% of the bonus at the end of the primary term of the original lease only if they have not drilled yet.
4. You are correct in tha the sign on bonus is partially based on where you live. This is also based on geological information, competition for the lease, the price of gas at the market, etc.
5. All resources for learning are good to know just remember the company sponsored sites will be slanted toward the company view. Please take time to educate your self from multiple resources and seek competent representation before doing anything.
6. North Desoto and South Caddo/South Bossier are the "hot zones" at present but they are also leasing in other areas. Even in the hot zones the leasing is slowing some due to the nose dive the price of gas has taken and other factors. It has not ceased but it has slowed.
7. There are several companies with the capability to directionally drill. Chesapeake, XTO, Encana, Shell-IMPI, Petrowhaws just to name a few. It is, however a good idea to research any company prior to doing business with them.

I also have some questions for the original poster:
Mom of 4: What in your lease makes you feel they knew abou the haynesville shale? Does your lease have a depth clause?
Permalink Reply by Bob on September 30, 2008 at 3:26
Any company that is operating has the capacity to directionally drill. The only "capacity" that it requires is money. Can you get an appropriate rig and pay for the lateral.

Even small companies have the "capacity" to do this.

They wouldn't be looking to operate in the Haynesville if they couldn't fork up the money.


You name a few huge companies like they are the only ones that are out there. I know you say "just to name a few". But which other few do you mean? Cabot, Range, Devon.... etc..?

There are many smaller companies out there with the capacity to operate a horizontal.
Permalink Reply by Kassi on September 30, 2008 at 10:32
I am aware the smaller companies can dirctionally drill if they have the funds but did not want to start a big debate over whether small companies can drill or not.I was simply trying to illustrate that there are many, many companies that can directionally drill by giving a few examples and chose to use names that may be familiar to the poster instead of naming Benedum, Petromax and other companies she may or may not have heard of. Besides, does it really matter which companies are named as long as the point is made?

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