Drilling gas wells

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J&T Farm

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Has any one had any natural gas companies drilling on them. They were on us this morning doing 3d testing. They are everywhere. This is the second time them have tested on us. They built a 200,000 pond across the fence from us. They have drilled alot of wells around us. I figure they are going to stick a well right in the middle of our hay fields. They said they could put up to 4 wells on us. Our section hasn't been integrated yet but they got the section next to us last week. I wish they would stay off of us but we are the biggest land owners in our section so I'm sure they won't. Is there anything we should look out for? From what we have been told there is no way to keep them off of you. Even if you didn't lease. They just integrate your section and give you the average lease price in your section then do what they want to. There were a few people that got a no drill clause in there lease but they won't even do that anymore. Any advice welcome.
 
"Don't look a gift horse in the mouth" as the saying goes!

Gas wells are a viable source of continual income from ROYALTIES. There are also damage payments for land access, etc. They don't take up that much space, perhaps an acre at most. If they don't drill on your place, they'll drill on your neighbor's place.

Have your attorney review the agreements before you sign! Things can be negotiated.

Gas well production is a hot thing and is "free" money, unlike hay...
 
oh we are excited about it dont get me wrong, around here they have been using about 3 acres. Plus the road. And they don't want to pay much for damages. We did lease ours 3 years ago before there was ever any talk of drilling. This was 1 time we shouldn't have listened to the oldtimers they said lease and take there money that they have been leasing for 50 years and they never did anything. So we did we leased for 25 per acre and 1/8 royalty and now they are paying 700 per acre to lease and 1/6. But hindsite is 2020. We have had several people call us and they have offered 2000 per acre to buy or minerals but if they want it that bad then we decided we better keep them. We have been told that we were better off to lease for the 25 because the bonus money will be deducted as expenses before they start paying your royalties. So we will actually get paid before the people who got the 700 per acre. I don't know if this is true. But it was our mistake. We learn from our mistakes. :oops:
 
J&T Farm":2p41jmfk said:
oh we are excited about it dont get me wrong, around here they have been using about 3 acres. Plus the road. And they don't want to pay much for damages. We did lease ours 3 years ago before there was ever any talk of drilling. This was 1 time we shouldn't have listened to the oldtimers they said lease and take there money that they have been leasing for 50 years and they never did anything. So we did we leased for 25 per acre and 1/8 royalty and now they are paying 700 per acre to lease and 1/6. But hindsite is 2020. We have had several people call us and they have offered 2000 per acre to buy or minerals but if they want it that bad then we decided we better keep them. We have been told that we were better off to lease for the 25 because the bonus money will be deducted as expenses before they start paying your royalties. So we will actually get paid before the people who got the 700 per acre. I don't know if this is true. But it was our mistake. We learn from our mistakes. :oops:

YOU need to see a lawyer who deals with mineral leasing. You have some things very bass ackwards.

No offense,,, but it is to your definate benefit to know what is going on. It can be the difference between a pleasant, profitable experience and a night mare.

IF you have a lease already you are confined to what was set up in the lease. No going back now.

If you have more specific answers ask away and we will try to help as much as possible. There was a thread a short while back that has some good info in it. I will look for it later if I get a chance, also.
 
They are drilling test holes todays about 100 ft from our backup well for the chicken houses. We have 2 other wells that we use to water the cows and are also backups for the chicken houses. They told us the wells would be fine. When we signed the form to let them enter our property, we added that they are to pay us for any damages they cause. Hayfields, water, cattle, fences. They said it was all covered and all we have to do is report it. He wrote it in on the form we signed.
When they come to get permission to drill what are some of the things we should tell them or ask them to do? In some places in the county they have paid up to 20,000 for a pad site and road in other places people took there first offer of 6,000 and didn't ask for more. What would a fair price be? We make all our living off the farm, chicken houses, hay and cattle. Most of our land is pastures and hay fields. And we have 68 acres of timber. we would rather them drill in the woods and stay out of the fields, but I know they will drill where they want to . It would just be nice if they picked the woods.
 
ok I did some research and found some info on the forum. Now I have some questions. Around here they [Seeco] are paying $2 a foot for pipeline, they pay on average $8,000 - $10,000 for a pad site, and $5 per acre for 3D testing. The leases started out at $25 and acre 3 years ago to $700 on acre now with a larger royality. They are paying 10 cents a barrel (42 gallons) for water from the ponds. Or they will build a pond for you but they get to use water free for 10 years. No one around here knew anything about the gas drilling so we don't know what is fair and not fair. Our if they are taking advantage of us. What should we ask for?
Brute23, You are right we need to learn more, but its hard to around here because even the lawyers have no idea. So I have tried to learn as much as I can from people that have had wells and delt with these things before.
 
J &T

Here as some O & G duscussion sites:

http://www.naro-us.org/forum/
http://groups.google.com/group/Royalty-Owners-of-Texas
http://groups.google.com/group/anythingoilandgas
http://blog.provenconceptsinc.com/

The bottom line is the gas company can do pretty much whatever they want unless it is prohibited in the lease. If you signed the lease you have to live with it. The problem is usually not what the lease says, but what it doesn't say. If your lease doesn't specify how much they are to pay for drilling pad sites, water, pipeline,etc then you are pretty much at their mercy as to the amount.

I would suggest you check with others in the area and see what they were paid for these damages, so you will have an idea if their initial offer is reasonable. The first offer usually low and if you have done your homework and are a good negotiator they may pay more if you have the right ammo. Better yet, with several hundred acres a good attorney will probably be a good investment.

Hope this is helpful.
 
Well they leased the minerals almost 4 years ago, this is the second round of seismigraphing. The first round was 2D and now they are doing 3D. They told us when they came thru the first round that with our land there could be up to 4 wells on us. The woman that did the permission for testing said they are looking at 6 to 8 wells in all the sections in our area. Who knows for sure. They do have a pipeline headed our way.
One of our friends has 16 acres and 1/8 royalties his lease is the same as ours. He has 2 wells in his sections and he has been getting a check for a little over a year. It is still between $1100 and $1200 a month. It did go down a little after about 6 months it started out at $1500 a month. I thought that was real good for 16 acres.
 
Besides raising cattle, I'm an oilfield consultant. I drill oil and gas wells. The company that you leased your mineral rights to can only do what is in the lease agreement. Anything else is to be negotiated by you and their representative. I have actually been run off a farmer's land with a shotgun! He didn't own the mineral rights. Had to get the sherriff to calm him down. Check your lease agreement and go from there. :D :D
 
Paul54":glkteflm said:
Besides raising cattle, I'm an oilfield consultant. I drill oil and gas wells. The company that you leased your mineral rights to can only do what is in the lease agreement. Anything else is to be negotiated by you and their representative. I have actually been run off a farmer's land with a shotgun! He didn't own the mineral rights. Had to get the sherriff to calm him down. Check your lease agreement and go from there. :D :D
Hope that was some hot tempered Cajun and not one of us Good "Ole Redneck Boys.
 
Thank you all I have lots of reading to do now. I will study our lease some more. And I am going to really check into all the information. We did have it in our lease that they pay for any damages to or hay fields and pastures. Yesterday they drove the test hole drilling rig and a truck over our only hayfield we have left to cut. They drilled 6 test holes in the field. The grass was about 3 foot deep and its so dry now that it wont stand back up. I guess we will see if they will stand by there agreement to pay for it. Or at least pay for some. They went right thru that field again this morning, to get to another field. Could have went around it, but oh well. And thanks again for all the info.
 
Video tape, take pictures, or get something in writing from an eployee about the damages.

Don't just take their word that they will fix everything... document everything.

Even if it is not a big deal now and you can live with it... if things ever get nasty or you neeed some blackmail you will always have it. ;-)
 
I did take pictures yesterday of them in the hayfield, I am going to go out today when they get done and take some of the damage. I know those 4 huge wheels on that thing flatened alot of grass, not to mention the truck also. They made about 6 passes thru the field. And then again this morning. They had there riggers down of the drilling rig this morning and fired it up about 30 feet from our well for the chickens houses my husband went up there and told them about the well, they said they were just servicing it and then they moved on. Thanks again.
 

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