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Permalink Reply by P.G. on December 26, 2009 at 5:41

Would suspending the drilling still hold their lease?

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Permalink Reply by sesport on December 26, 2009 at 6:21

BD - IF this is indeed what MO's were told, sounds to me that something was left out of lease clauses and now the company is trying to do a "work around" to close a loophole that favors the mineral owners. Just saying ... not an expert, tho. Pure speculation on my part. 80)

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Permalink Reply by sesport on December 26, 2009 at 7:41

BD - I recently saw what I considered to be "fuzzy" language in a contract. It has been sent to qualified legal counselor for review. You're right to trust your gut, though, when talking to them. I think as we see companies build more of their own infrastructure, it will become more common for them to shift expenses/costs to lessors. If the companies can create a loophole clause, they will. If they go back and find they don't have a loophole, they'll probably try to amend contracts. See paragraph 8 from a recent Petrohawk release ...

http://www.petrohawk.com/news/?id=1278493

"In addition to its existing infrastructure from operations in Elm Grove Field of northwest Louisiana, Petrohawk has completed construction on more than 50 miles of 16 inch gathering lines as well as approximately 330 Mmcf/d of treating capacity to service new production from the Haynesville Shale. The Company expects to construct an additional 112 miles of gathering pipeline and an additional 420 Mmcf/d of Company-owned treating capacity by the end of 2009."

Just my THOUGHTS, I'm not an expert. You're right to question this and correct that they should listen to their attorney.

80)

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Permalink Reply by drilltheshale on December 26, 2009 at 6:21

Sounds like a good time to ignore them. If Encana doesn't drill, somebody will.

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Permalink Reply by Randy on December 26, 2009 at 10:34

I think he is trying to say that we just don't have enough information about what was really said or the other details that may have been inadvertently 'left out' to make a judgment call.

I somewhat doubt EnCana would suspend drilling a well on something like that for a few reasons; the cost outlay of rigging up and rigging down, the money they are losing by not completing it, etc.. Now they may put off completing it until the pipeline situations are worked out, but that's normal stuff. I'm sure at some point someone who is near the situation will give us some more information.

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Permalink Reply by Randy on December 26, 2009 at 12:03

Right but do you (really) honestly believe that one fact is the whole story? I dunno, maybe if I saw a copy of the document they want executed. It just sounds like there is more to it than what I'm hearing.

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Permalink Reply by sesport on December 26, 2009 at 12:10

No, BirdDawg said he's "only repeating what he's been told" in the topic opening. No reason why we all can't question these things and try to find answers, maybe avoid some misunderstandings & problems. He's following his gut instinct to question just like you are when you say "It just sounds like there is more to it ..."

Further, it seems that a lawyer is involved so why on earth would someone post a document that might be part of a legal negotiation?

80)

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Permalink Reply by sesport on December 26, 2009 at 13:10

BirdDawg posted, "This family is represented by Mr. Bethard ..."

I believe we ARE done "cherry picking," most postings, including my own, said we ARE SPECULATING about this situation. Better to have it out in the open, IMO, than circulating wildly through site inboxes.

Just saying ... 80)

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Permalink Reply by HBP on December 26, 2009 at 13:17

I cannot attest to the pipeline deal with any first hand knowledge - but Encana has stepped on some toes lately down there and (IMO) are not handling their negotiations w/ the large owners very well.

Also, as far as threatening to suspend drilling - Encana is on a clock right now on many leases down there - I can't see them letting a rig sit over pipeline costs with a few owners. That would be cutting off much more than just their nose to spite their face

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Permalink Reply by BirdDawg, plain ole' idiot on December 26, 2009 at 13:22

HBP,
I agree. And I agree with one thing Randy posted earlier, that maybe "suspend drilling" maybe should have said "postpone completion".

What pipeline and how far are they wanting to lay it? And true, what are the lease deadlines? Maybe they have plenty of time to sweat mineral owners.

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Permalink Reply by Randy on December 26, 2009 at 13:35

I wasn't really trying to imply anything about your integrity buddy. I don't have any bulls in this fight :) I'm just interested cause I know some landowners down there who have business with them.

But yeah, to clarify, I know nothing about this situation at all. I don't do any business in the area. I found it interesting cause I think some feathers must be really ruffled for them to start arguing and making threats over pipeline issues. Seems like you'd lose more money than gain by not having your production online?

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Permalink Reply by Randy on December 26, 2009 at 13:30

Don't know who Korman is?? :(

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