Replies to This Discussion

Permalink Reply by Explorer on December 30, 2009 at 3:11

stroud,

No offence taken. I was just playing "devil's advocate" as my dealings have been problem free with them thus far. As for the topic at-hand, I have not heard anything about it.

David

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Permalink Reply by essay on December 28, 2009 at 15:13

being a native of the parish in question i know how the rumor mill works, all i'll say is this issue seems to actually have some legs to it.

/pulls up a chair and looks for popcorn

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Permalink Reply by Randy on December 30, 2009 at 4:23

All are good, solid questions. I don't think we have those details available to us. :( Although most of the operators are seeking utility status, I'm not aware if they've been awarded that.

I'm thinking if it's just a gathering line that (of course depending on lease language) that they could capitalize that expense, but the minute you start putting other units gas in it you have a whole different story. Unless, again, they have a subsidiary with public utility status. In which case they would have to let anybody else tap into that line as well, right?

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Permalink Reply by Just Saying on December 30, 2009 at 11:59

Pretty easy solution. If you dont want to amend the lease and see if they walk then dont amend it. Just don't boo hoo when they walk and no one else shows up. They are prob talking about a gathering line into the pipeline. These can be pricey and if the cost of the gathering line kills the economics of the well then they might walk. If the rig is already drilling then it would be highly unlikely, but you never know.

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Permalink Reply by intrepid on December 30, 2009 at 12:44

And if they walk then they will walk away from the gas to sell it later when the price goes up and the economics are better. So I don't see why he would have a reason to "boo hoo".

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Permalink Reply by sesport on December 30, 2009 at 13:22

BirdDawg & Intrepid - "boo-hoo" aside, After thinking about this the past couple of days and reading on all the pipeline activity going on, I now too believe it's an economics issue. We need a lot of infrastructure still, and, like the rigs, it can only be put in place so quickly. Add to that companies need to raise capital and/or get lending, which is tight right now. Didn't one of the pipeline companies just cancel an "Open Season?"

Of course, MO's want their gas produced & sold, they're probably also experiencing some belt-tightening. I still say their attorney knows best how they should proceed. It would be interesting if they could find a way to own their pipeline, maybe form their own energy partners LP.

80)

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Permalink Reply by Randy on December 30, 2009 at 15:56

That would be a game changer.

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Permalink Reply by sesport on December 30, 2009 at 16:53

80)

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Permalink Reply by sesport on December 31, 2009 at 9:58

Of course they will. The Lessee is fully aware of what's in the lease contract, as are the Lessor(s)/MO's and their counsel. And I'm sure the terms of that contract will be honored and fulfilled to the mutual satisfaction of all parties. 80)

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Permalink Reply by Just Saying on December 30, 2009 at 16:18

Guess that answers the debate then. Don't do anything and risk them walking. I have dealt with many people who were advised by their attorney to respond a certain way and wound up regretting it. Maybe the best thing to do is not to sign anything and risk not getting a well drilled. Maybe they will be able to structure something that will work for both groups. Maybe they could only withhold a certain percentage of the costs ect. Maybe this is just a bluff by Encana, who knows? But I have experienced folks who say "We are not doing anything" and it is sometimes not the best approach. The next company that comes along may not be able to get a well down and completed in order to make a good one. Hope they can work it out, but if I were a mineral owner in this area I would take the statement seriously and try to work something out with them.

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Permalink Reply by sesport on December 30, 2009 at 16:53

JS - Then IF that's what the MO's decide they want to do, they will instruct their attorney of their wishes, and the attorneys for the 2 parties involved will work it out. At any rate, all parties involved have OPTIONS, just saying.

80)

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Permalink Reply by TEXWS6 on December 31, 2009 at 11:30

Kinda funny how things get spun, EnCana is NOT forcing landowners to pay for a pipeline. Like all oil and gas contracts, the mineral owner is responsible for PART of the transportation costs. This is how it has been and this is how it will be. The group of landowners think that EnCana should pay for their part of transportation costs plus EnCana's. It has NEVER been like this. Please get your facts straight. EnCana is paying for the pipeline.

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