This is an outsider view, but I see this as Petrohawk offering what they believe to be a reasonable price, while Chesapeake is using their financial stability to overrun Petrohawk. In no disrespect to you, you are simply a pawn in their play. There is no guarantee that either company will go into production, but I find it more likely that Petrohawk would have more to gain by going to production on your area than Chesapeake does. With Chesapeake obtaining the majority of land, while Petrohawk relies on limited resources, Chesapeake could afford to elect which areas they work into production, and which areas they leave dormant.
While Chesapeake is an impressive presence, Grice makes a great point that Petrohawk is depending on drilling right now and they have already proven how to do it right with their first Elm Grove well.
Chesapeake will also drill in many areas, but their leasehold is so wide right now, I can't see them being physically able to get to all of it. They will farm out some, sell a position here or there, and some may even simply expire in the 5 years (it's possible). But lets look at Chesapeake's actions in the Marcellus. They bought many, many acres, but have not backed up all the drilling they claimed they would do. Instead they are holding most of the landowners with 5-10 year (yes 10 years) leases and touting their "reserves". Whose to say they don't do that here.
(Eyes popping out of her head at screen) Is that where some of those reserve numbers come from???? From our properties that they have leased, but never drilled? Let's pretend that I found my sweet spot and signed a lease. I think that is misleading, and misrepresentation to say that my interests are part of their reserves. As of this point in time, no one seems to know where the edge of the south western boundary lies, and there is not a verified, completed Haynesville well in Shelby County, TX to really say for sure that there is reserves there.
If you signed a lease, then the minerals lieing under the lease, less your royalty, belond to them now. At least for the term of the lease. So yes, they can claim these as potential resources in their reporting. This is fine and I don't see where its misrepresenting. If they fail to drill or live up to the terms of the agreement, then it reverts back to you.
One thing to add to the thread: its not only a factor of CHK having more land and HK needing to produce more, etc etc.; look at the number of rigs being run by either company. If CHK has twice as many acres and twice as many rigs, then it won't matter. They'll get to it about as quickly as the other guy. More important is where the acreage lies with regards to the geologic sweet spot. Another factor: how many expiring leases lie in the area around you. They will bust a butt to get a well drilled in a unit that has several expiring leases.
My opinion (from someone in the business and a competitor of both): you'll be happy with either one. Take whichever has the best terms starting with: royaly %, bonus, protection of rights.
Okay is this advise that is coming from knowledge or do you work for chesapeake because this is something that is going effect our lives dramically,bad or good. This coming from someone who remember winning a cake at a cake walk at her school festival 15 years ago. Nothing has come easy since.
No I don't work for Chesapeake. I simply stated the fact that they are they best onshore natural gas producer. Currently they have 12 rigs drilling with dozens more to come. Even with only twelve they are completeing a well every 5 days (according to Aubrey McClendon).
Take the better offer (as you deem the offer to be). Both companies (and others) are agressively exploring the Haynesville Shale. Most likely there will be leases taken both companies (and others) in your section. When unitized the company with the largest acreage position in the proposed unit will be designated as operator by the Conservation Commission. That means that even if you lease to Petrohawk, that Chesapeake, or another company, could operate the wells in the unit if that company has the largest number of acres in the unit. The companies are agressively and competively acquiring leases, but when the leasing is done and the acreage numbers are in, the companies will have to work together on a unit-by-unit basis to drill and produce. This is not collusion, this is business.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More