Replies to This Discussion

Permalink Reply by BJ on January 15, 2010 at 7:42

My inlaws were pd $26,000.00 for 5 acres, this was for everything(including timber).

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Permalink Reply by JeffNParis on January 15, 2010 at 8:23

Thanks BJ. Was this by Chesapeake or someone else?

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Permalink Reply by BJ on January 15, 2010 at 9:10

Encana, Red River Parish.

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Permalink Reply by Missy on January 15, 2010 at 17:24

About $40,000 for about 5 acres. $5000.00 per/acre surface. and $3000. per/acre for timber.

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Permalink Reply by JeffNParis on January 15, 2010 at 19:11

Missy...can you tell me who leased your land?

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Permalink Reply by Missy on January 16, 2010 at 16:36

Jeff,
Questar.

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Permalink Reply by Henry on January 16, 2010 at 9:02

BJ,
Is this a one-time payment? Please help me understand... presumably the driller ties up the entire 5 acres while drilling. But then, after the well is completed, they pick up and move everything away but what's left at the actual well, itself. Does the $26k include any restoration of the vacated site? Does it include access forever to the remaining well? What exactly does the $26k cover?

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Permalink Reply by Spring Branch,mineral owner on January 16, 2010 at 14:48

The site is not vacated after the well is drilled. There is plenty "left" on the well pad after the well is completed.......christmas tree, seperator, tanks, risers, piping, and on and on. The pad will be visited multiple times a day by a saltwater/frac fluid disposal truck and at least once a day by a pumper. The entire 5 acres remains "tied up".

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Permalink Reply by Henry on January 16, 2010 at 15:04

SB,
But once fracing is complete, pipes are laid, and the visits stop, the well no longer requires 5 acres. Right? So does the driller restore the unused part?

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Permalink Reply by Missy on January 16, 2010 at 16:21

The well pad location is "leased" by the company for as long as the well is producing, and until they plug and abandon it. This is many, many years. Restoration or any thing else you desire can be negotiated for in your surface lease agreement. In effect, you have lost the use of that 5 acres for the lifetime of the well, and if the land is used for growing timber, IMO it is lost for as long as I can possibly imagine. This is why you want to insist on them paying you for 30 year growth.

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Permalink Reply by Love Horizontals on March 17, 2010 at 15:01

Some oil company's will "reclaim" most of the pad site with pasture grass......but as you note this does compensate for the loss of timber growth.

In past I have used timber growth as an arguement. However, if you put the pencil to it, even when timber market is high (which it is not right now), they will usually pay you MORE/ac than the timber will yield/ac in 30 years of growth.

The real arguement is that they are "cherry picking" acreage. If you own 50 acres that is worth $2,000/ac, you wouldnt sell a 2 to 5 acre site out of the middle of it for $2,000/ac..........not only is there damage to what they are using, but the remainder of the 50 acres has been damaged to because it has a 2 to 5 acre "out parcel" out of the middle of it.

Also, dont forget about damage to acreage from oil co road to pad site.

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Permalink Reply by Love Horizontals on March 17, 2010 at 14:53

$4000/ac Plus timber is a good price (you sell the timber). The key is the amount of acreage they pay you for and the amount they actually use.

My experience is that the oil co says they only need, say 2.5 acres and that is ALL they want to pay for. However, their contractors have ALWAYS use more. They get off the 2.5 acres with their trucks, stack pipe, equip etc. Take pictures. You are entitled to be paid for everything they use.

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