Natural Gas Wells

[Wayne County Hose]

There has been a major gas company leasing up land here in northeast Pa for the purpose of drilling gas wells. Some around here welcome it with open arms, while others do all they can to stop it. Does anyone out there have any first hand experience with these leases, and with the environmental impact? Some in the beginning got $250 an acre for about a 6 year lease to the gas rights. Now, there are offers of $1250 an acre and I am hearing possibly higher. We are hearing a lot of "stories" of what is happening around the country with these gas wells. We don't know what to believe. There is also a group around here taking out newspaper ads with what "could" and "may" happen. I know these wells are already in certain areas, anyone know anything?

 

[MMagis]

We've had a lot of wells drilled in my area in the last 7-8 years. We've had two drilled on our farm. Really no problems to speak of. They didn't clean up the last site quite as well as the first, but that was the only real problem I had the whole time. Still, they did a decent job. Make sure you are very clear how you want the area to look afterward. They typically will work very hard with you to make sure your happy. At least that's been my experience.

 

[Bird]

No personal experience, but there's sure been a lot of gas well drilling going on in this area recently. Some of the cities and some school districts are letting them drill on their property to get that income. And as you said, some residents complain about noise, traffic, possible safety hazards, etc.

 

[MMagis]

I guess I could also mention that our last one was drilled within 200 yards of my house. Nothing between the rig and me but open air. I was surprised how little disturbance it was. If I wasn’t outside I couldn’t tell it was there. It was also drilled within 75 feet of my personal gas well, which had me more than a little worried. They assured me it wouldn’t cause any problems, and so far they’re right. I think more often than not, people just like to complain. To me, the positives outweigh the negatives.

 

[KAB]

Here is an article about some problems http://www.wkyc.com/news/rss_article.aspx?ref=RSS&storyid=84673. Like any article it only looks for the problems not the positives. I can tell you that there are a lot more wells in this area than problems that have happened. But you should have access to some of that bad, just remember that there are a lot more good.

I should also note that if I had property that would qualify for a well... well... there would be a well.
Kurt

 

[Bird]

I think more often than not, people just like to complain.

Yep, and from what I've seen in the news, it appears to me that most of the complaints are about the "potential" problems; not actual or existing problems.

 

[Wayne County Hose]

Yep, and from what I've seen in the news, it appears to me that most of the complaints are about the "potential" problems; not actual or existing problems.

And that's a problem. I don't want to say if I support them or not, as I am just looking for what has happened in other areas with these gas wells, good or bad. But one thing I can not stand is the fear mongering. There is a serious "potential" problem in everything we do. When I was a maintenance manager, we used to do risk assessments. What could potentially happen, what was the worst case result, and the probability of it happening. These people lead you to believe our water will be ruined and that the gas company leaves the landscape looking like the Mars landscape.

 

[MMagis]

Since you brought up water quality, it reminded me that my neighbors also expressed concern about their water as well. I told them I would ask about it, so I did. My contact told me that in 30 years he only knew of one occasion where it effected someones water, but if it happened they would drill a new well for that person. There were no problems, but it was nice to know and made the neighbors feel better. As for the landscape, I suppose all companies are different. But, on our farm they did a very good job of putting things back the way they were. All top soil is moved to one pile and put back on top when done. Our last well was drilled in the middle of the soy bean field, on the side of a hill. They dug out a roughly 100 yard square work area, but now you would never know they were ever there, other than the pipe coming out of the ground.
On the negative side, they cut and pulled up 300 yards of metal gas line. I already had it shut off at the well, but they never asked anything about it. Plus, that gas line is still in the field. I can make use of it, but I don't like pipe left laying in a crop field. That was our second well. I had no problems with the first well.

 

[EastTexFrank]

Realize that we are talking about 2 or 3 different companies here. The "Operator" is the company that buys the lease and controls and is responsible for the exploration and production. They in turn usually hire the "Drilling Contractor" to physically drill the well for them under their supervision. There will also probably be another "Contractor" that builds and reclaims the well locations, again, under the supervision of the "Operator". So, if you have any problems with damage, trash, how the location was left, etc., contact the operator. He already has contracts in place with his "contractors" on how the job will be done and what standards and criteria will be met. If anything breaches your agreement with him, he legally has to fix it.

Usually, and this is a VERY general statement, the larger the operator, the less problems you are going to have because they just don't want the hassle of dealing with irate landowners and they usually have more resources to fall back on. Having said that, get everything you want and expect in writing and agreed to before signing anything. It's a lot easier for both parties if everybody concerned knows exactly what is expected of them before the operation starts.

 

[chetorba]

I am in NE Pa (Hallstead area) and have ben approached by companies about leasing my property for gas exploration. It sounds like easy money so I was leary. I contacted my friend who is a lawyer. He read the agreement and advised me not to sign the lease. The company was offering $250 per acre for a five year lease. As he put it, what you give up in property rights is no where close to the the $250/acre that they pay you.

The lease grants the gas company the right to take over your land. They can build roads, run gas lines and put well heads. The only limitations are the state regulations which limit how close the can put a well to a dwelling. The lease is automatically renewable by the gas company.

My understanding is that these leasing companies are in a race to lease blocks of land because whoever signs up the most acreage in a square mile area "wins" the right to drill in that area. If you land is within the designated square mile block, you are entitled to the royalty payments for all the wells with the drilling area whether or not you sign a lease agreement


This web site has alot of good information:

Bureau of Oil and Gas Management

 

[tommu56]

Andy
I was called about a lease for my property in lycoming county but they never left any info to contact them and they didnt call back.

They did drill 2 test wells between 287 and 44 above Jersey Shore I don't know how they did.

The drilling co made some of the forrestry and township dirt roads wider and smothed out some of the hard turns.

tom

 

[cup149]

Around here, Armstrong Co, PA, they have drilled many wells in the last two years. Cleanup isn't perfect, and sometimes they leave the trees and brush that is pushed over when running the gas lines. And there are the dirt roads needed to access the wells, not exactly pretty. The drilling only takes a few days, so the noise isn't much of a problem. There can be some odor from leaking mercaptan or oil that collects in the tank. Just last week in Dayton, an older woman had gas bubbling out of her yard. Turns out a well being drilled nearby caused gas to travel to a porous sandstone layer, making it's way to two old gas wells, then to the surface. Get every detail in writing and keep a close eye on them.

 

[chh]

Here in Oklahoma 3 years is a common lease term. I personally prefer 2 year leases and offer an option to renew for 1 year at the same price(if the don't drill you get paid twice for 1 lease ) Anything over a 3 year lease would be at a premium price. Current leases are running in the $300 to $400 an acre range. Leases do NOT automatically renew unless you sign for that option in the contract. Setback from buildings, use of roads, feilds you want avoided, and % mineral interest paid are all negotiable items. If you are concerned about something bring it up, if they want the lease bad enough the will work with you. Watch the mineral interest clause, many companies want to pay 1/8, but will pay 3/16 if you push a little. So far I have had very little trouble with site cleanup. Most companies don't want the hassle of messing with a mad landowner so they do a pretty good job.
Are they drilling deep wells or for shallow coal(methane) gas? If the primary focus is shallow you can also put in a depth clause for depths deeper than that to keep deeper depths open for a later lease.
If you have any questions on a lease, it would pay to consult an attorney before signing. Your state laws may have some differences. Talk to your neighbors in the same section and negotiate as a group if you can or at least keep tabs on what everyone else thinks. Of course somebody will always get anxious for the money and sign first. Usually then that sort of sets the price for your section or area because they have a solid number to work from then. If you don't sign you can get "pooled" so the company can drill anyway.
On payment they usually pay the lease payment by draft. 30 business days is common. My last lease I negotiated a 10 day draft for payment. I have also been paid by check, but it isn't really any faster that a draft in most instances.
BTW, if they don't want to negotiate the roads and setbacks ect.. and say that they will handle that when they drill when they are negotiating damages, don't believe them. Damages is a seperate negotiation and property concerns need to be in the lease. If they are in the lease then they must follow the lease terms or pay enough $$$ to satisfy you to do something else in the damage phase.
Most of the stuff people scream about on eviromental damage is just BS anymore. In the early 1900's most of the bad stuff happened and went on regularly. Anymore there are enough regulations to keep things in check. Now if we could get the envirowackos to shut up about some of this they could actually drill the North Slope in Alaska and then we wouldn't be giving all our $$ to the middle east and Hugo Chavez.


Good Luck.

 

[TheHammer]

I haven't been approached yet, and I really don't know whether or not I would lease my property. I can't decide until I see the terms of the contracts for myself and consult an attorney who is well-versed in these types of leases.

I did notice some in the community have formed an organization opposing these leases. That's fine, but what disappoints me is the propaganda. Yesterday, I saw a large newspaper ad that listed all kinds of nasty things that would happen if you were to lease your property, like your well water will be contaminated by poisonous chenmicals, the PA Dept. of Environmental Protection cannot regulate these companies, etc. It just seems like scare tactics. Landowners shouldn't take the word of either side, and really need to do their own homework.

 

[EastTexFrank]

chh, that was a great reply. The thing that you allude to but don't specify is that just about everything is negotiable and that the oil & gas companies have a lot more experience negotiating these leases than the average landowner. So, if you are in any doubt what-so-ever, contact a lawyer. It could be money well spent as the amount of cash involved down the road could be substantial. The difference between 1/8 and 3/16 royalties doesn't sound like all that much but over the next 10, 20 or 50 years you could be talking about real money. My wife's family still have a few leases producing today that were drilled back in the 40's. Think long term.

By the way, I couldn't agree with you more about the envirowackos.

 

[ToadHill]

I signed a lease several years ago and when they sent the lease agreement to me, I sent it back with VOID all over it and sent a copy of my lease agreement. I had my lawyer draw up the lease as an exact duplicate of the leases the state signs with these companies when they deal with them.

They came back and said I had to sign their lease, I answered that if they read my lease they would see it was the same as they had signed in many cases with the state.

They must have decided it was "ok" because they signed it and sent it back about a week later.

 

[pennwalk]

I am not too good at searching but I seem to remember a thread about drilling wells where the poster wasn't too happy. Can anyone find it?

Chris

 

[Ken]

When the area I live in the Fayetteville Shell locations the first thing that happened were papers to lease the mineral rights for a listed amount. This was by a group wanting to lease a section of mineral acres. or you could list what you desired.
This lease covered mineral rights and not Surface rights to the property.
After the leases were purchased then the Drilling contractors would contact the area owners where drilling was to be placed. The site would be prepared and pipeline easement was shown and this was paid for to cover disturbed area. When drilling started the first bore was to a depth below water depth. then concrete was forced from bottom of bore pipe to surface so no leakage of water into or drilling fluid out of well. site then another drill rig rebored to well depth of gas production area.again another pipe was cemented in place.
A third specialized rig drilled horizontal lines for approximate 1 mile in the shale formation.
Then with water and sand cracked the shale and perferated the line to extract the gas.
All this takes about 3 months to complete . Then everything is removed except the pad area and metering and control valves couple of water storage tanks.
If You don't want a well on your property but have leased the property for gas they will work with you or drill on adjoining land.and pay your portion of mineral rights to you.
Nothing can be done until the well is properly applied for by the State gas Commission that issues a drilling permit.
All the complants come from those who haven't any mineral rights.
(so far have 14 wells under my property not a rock has been disturbed) on the surface.
Again nothing will or can be done with out surface owners agreement. Road or pipe easement is paid for by the foot length.
ken

 

[jinjimbob]

You won't know if the water wells have been poisoned for many years. After your children have all these new medical problems, you'll then wish you'd not got a little bit of money for gambling with their health. Money makes people blind.

 

[Kal130]

I think the documentary "gasland" is about this. It's currently up for an Oscar. Haven't seen it though.