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Permalink Reply by Les Bamburg on April 27, 2010 at 10:34

Kenya, there is no current drilling in that section but two wells have been drilled nearby. The section has been unitized.

Chesapeake, Pankey 23 #H1 Well, Serial #240371, S23-T14N-R15W
Chesapeake, Pankey 26 #H1 Well, Serial #240896, S26-T14N-R15W

S24-T14N-R15W, HA RA SU81 Unit, Chesapeake, Bethany-Longstreet Field, DeSoto Parish

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Permalink Reply by kenya coleman ridgeway on April 27, 2010 at 11:16

thank you for that information. Another question?is Chesapeake the oil co. and drillers?Are they the ones who have leased in that area? A Company by the name of HTP and Associates has been speaking with my family can you tell me something about HTP and Associates or what have you heard?.

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Permalink Reply by Les Bamburg on April 27, 2010 at 17:55

Kenya, Chesapeake is the producing company (gas company) for the wells. Chesapeake is also one of the few producing companies that also have their own drilling company (Nomac or Chesapeake).

Most producing companies use a separate third party company or companies to handle mineral leasing. From Jay's comment that seems to be the case with HTP. I do not know which producing company has contracted with HTP.

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Permalink Reply by MALCOLM WHORTON on April 27, 2010 at 19:23

Would someone explain to me what do LES B mean when he talking about the section has been unitized? I'M also in S24-T14N-R15W

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Permalink Reply by Henry on April 27, 2010 at 23:56

Malcolm,
In order to produce the gas, a company forms a "production unit." For the Haynesville Shale, production units are almost always drawn up on section lines. In other words, everyone in a particular section is force-pooled into the production unit. The mineral owner has no choice in this -- but it is not a bad thing. The state allows the forced pooling so the gas company can drill in the section. All mineral owners in that section will share in the production, according to their proportionate ownership of the minerals. For example, if you own 40 mineral acres, then your share will be 40/640, or 6.25%. If you sign a lease, and say you sign for a 25% royalty, then your share of the gas will be 0.25 X 6.25 = 1.5626%.

When the operator is getting ready to drill, he applies to the state to be named the operator of the production unit. All land and mineral owners in the section should receive notification that this is occurring. After state approval of the unit, the next step would be for the operator to file for a drilling permit.

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Permalink Reply by Katie McCullin on April 28, 2010 at 9:53

Hey Kenya! There is drilling scheduled for that STR in the second quarter of 2011, but the rig schedule is very fluid; it often changes the second you hit print. Feel free to contact me for updates, and I can check on the status for you.

You're in a very busy area! Are we (Chesapeake) being good neighbors?

Thanks!
Katie

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Permalink Reply by kenya coleman ridgeway on April 28, 2010 at 16:51

Thanks for the info. I thought they(chesapeake was gonna be drilling in some weeks? Also yes you are being good neighbors..question my family has signed with HTP how does that work when they need to flip the leases to Chesapeake? can you explain?

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Permalink Reply by Katie McCullin on April 29, 2010 at 3:24

Hi! HTP does not work for Chesapeake. They are what's called a third party outside working interest owner. They sign leases on their own and approach other companies to purchase them.

If a company flips a lease, that lease could potentially be picked up by another company. If that occurs all division ordres and revenue come from the original company who flipped the lease. All other business dealings would occur between the two companies involved in the flip.

I know this can read a little sticky, so if you have any questions, just let me know!

Katie

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Permalink Reply by Les Bamburg on April 29, 2010 at 4:07

Katie, thanks for clarifying HTP's position and sorry about my mistatement above.

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Permalink Reply by The_Baron on April 29, 2010 at 4:40

"all division ordres and revenue come from the original company who flipped the lease. All other business dealings would occur between the two companies involved in the flip."


Not always Katie.... I have been involved in deals were we put together projects and sold. I say sold because not all leasing deals are flipping... Sometimes the terms of the assignment will require the assignee to handle a future responsibilities. For Example, we once sold a lease that was left over after a dry hole was drilled. We didn't "flip" anything...we sold an assest that we no longer required. The terms of that assignment basicly moved all responsibilities away from us, we no longer wanted to be invovlved.

Somtimes a company will buy leases on behalf of another, some operators don't want there name attached for a varity of reasons. When the leases are all bought, they are assigned to the operator. For example, When Twin Cities buys leases, and then assigns them to CHK, you will get a division order and royalty check from CHK.

Some companies do buy leases with the intent of becoming a working interest, these "blockbusters" will then participate themselves, attempt to sell to the operator for a net profit, or sell to a third party who is looking for a chance to participate.

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Permalink Reply by Katie McCullin on April 29, 2010 at 5:31

Not always is correct! Each situation is so differnt, that's why communication between leasing brokers and the lessors is so vital. Thanks for including that additional info.!

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Permalink Reply by Gregg Hosey on April 29, 2010 at 6:19

Hey Katie, Can you tell me whats in the works for Sec 5 15N 14W?

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