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 Tim on August 11, 2008 at 9:39
Quit crying and suck it up!
Permalink Reply by Mom of 4 on August 11, 2008 at 14:35
I didn't even have to read the question to know your reply was very rude!
Ed, husband to mom of four
Permalink Reply by ETOilman on August 11, 2008 at 9:48
Only if there is language added to the lease in the form of a rider or exhibit with language limiting the lease to 100 feet below the deepest depth drilled or produced. If the leases are still in their primary term and no such language exists on the form, the company has the right to drill to whatever depth they desire. The wells must be commercially productive to hold the lease.
Permalink Reply by Whatever on September 22, 2008 at 13:08
I have a question for you -- we signed a contract that states the depth is limited to 100 ft below the deepest depth drilled (I'm assuming this means after they have started the first well) The O&G man is calling us back to sign a "corrected" contract that increases the depth to 300 ft. Will that affect us or our share of the royalties in any way?
Permalink Reply by W Sharp on September 22, 2008 at 14:46
Just a question, If you specify a formation are you setting yourself up to have to fight a petition to DNR to reclassify the formation, as has been happening in the Cotton Valley area?
Permalink Reply by CBT on August 11, 2008 at 14:43
Chances are you signed with a land leasing co. and they flipped your lease to one of the big boys. We too thought we leased out 3 years ago ($100 per acre) to one of the "smaller" companies. We felt blessed to receive money back then...still do...However, we found out our "smaller" company has leased our acreage to Shell. Keeping our fingers crossed for a well...
Permalink Reply by Mom A1 on August 11, 2008 at 14:50
Oh boy...don't even get me started on this subject. We've been tied to poor production for about 10 years. No, I will not suck it up. I'm ticked off and I can't believe that the laws don't protect the landowner like they should.

Glad to meet another Mom that got the wrong end of the stick. Sorry to meet under these circumstances.

There are a lot of oil and gas people on this site that will help you but be careful...they are all in it together. They will defend eachother to the bitter end when they, themselves, are standing out in the open with their pants around their ankles. There is a saying...what comes around goes around. Also, don't eat yellow snow-says my husband.

;) Mom A1
Permalink Reply by mike wilson on August 11, 2008 at 17:11
Hey Mom: Don't blame the small company as large companies often have land brokers or even oil company sounding companies like Merlin Oil and Gas for example (Merlin is just land brokers.) No company has to disclose to you what they are drilling for when they sign a lease as you do not have to sign a lease if you do not want to. For example I know people that are being leased in South Louisiana as we speak for 100 to 200/acre and the company leasing is going to drill an offshore quality prospect on shore and spend $20 Million dollars to drill the well. Are they being taken advantage of; not really as it is their choice to lease or not. In any event just because you have shallower wells on your lease will not prevent another company (or even the same company) from even drilling right next to an existing well as long as they follow existing guidelines....all is good....what is your section township and range I will tell you who the operator of record is on your wells//
Permalink Reply by George III on September 29, 2008 at 5:35
Hey Mom, It's just my opinion, but it's time to find an experienced O&G lawyer- There is a thing called a demand letter- which starts the ball rolling- demanding that the company "drill or drop" - drill the deeper formations so that your property won't be drained by your neighbors, or drop the lease-and so on.- You have choices - If your land is on top of the Haynesville- you'll probably get a Haynesville well- sooner or later- the company that has your old lease is obligated to produce the deeper formations- or "farm out" to a company that will produce the deeper formations-chances are they are working on it right now- you need a lawyer to stir the pot-like all of us, as individual civilians you'll "get no respect"- But your lawyer will get a response. I would suggest a fee based lawyer who has been doing O&G law for a long time-Yes it's expensive but you're looking at a 1,000 to one payback if successful. Is your land in the Haynesville shale area, as shown on the most recent maps ?
Permalink Reply by Joel on September 22, 2008 at 14:05
Your options depend entirely on what your lease says - how long the O&G company has to start operations, what formations those operations hold etc. If you have a 'vertical Pugh' clause then their not having drilled deeply may mean your deep rights may revert to you.

Best advice I can give you is to get a lawyer involved to review the lease. They are worth the money. For this, to avoid any conflict of interest, just ask if they represent the small guy drilling your acreage - if they do, then ask them politely if they could recommend someone else.

I know some knew of the Haynesville and were leasing at old prices before it was common knowledge, but I hadn't heard anyone doing so two years ago - it may be your small guys are on the up-and-up. Just a thought. :)

Best,

Joel
Permalink Reply by Grice on September 22, 2008 at 15:22
Just out of curiosity; What part of the lease has lead you to believe the company knew about the haynesville shale?
Permalink Reply by Bob on September 26, 2008 at 9:29
You will never convince these kind of people that companies did not lease them in the Haynesville knowing that the acreage was worth more than they were paying in bonus. Don't even try. They will claim they were cheated and treated unethically all day long.

They continually fail to understand the other side of it; The fact that when companies came in and leased the Haynesville, all that was there was mere speculation, and these companies were taking huge risks. This is how it is with any play, resource plays included. You may not have many dry holes, but you are going to have a lot of uneconomical wells. Nothing is a guarantee in the oil and gas business.

These people do not understand that tomorrow their acreage could shoot up in market value by 300%, and that it can also become virtually worthless just as quickly.

They are the owner of the minerals, they were leased for less money 3 months ago than what is being leased for today, and by God it is all the oil and gas company's fault.

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