Land in question is in West Virginia near a U.S. highway running SE from the Ohio River, about 25 miles from the river. The contract I have received for review states that the goal is to tap into a gas deposit thought to be at least 3000 feet below the surface. Method to be used is horizontal boring. Royalties are to be paid from the gas produced, no mention is made in regards to ACTUAL source of the gas. I question the ability to horizontal bore, using the strict definition of the term, and tap into gas under my jointly owned property from a bore started within the foot print of the property. The land is just under 25 acres about 2.5 x 10 acres for a rectangular foot print.
A typical build rate of 10-12 degrees per 100' would enable the well to be horizontal within 500' or so of the surface location. It is possible, although more challenging, to build even sharper than that if need be. It is also fairly common in some areas to drill the opposite direction initially, then come back so as to be horizontal directly under the surface location.
I am still in disagreement with the company wanting to drill. I believe that since this property is 24.5 acres and has a footprint of about 2.5 acres x 10 acres, the bore is NOT going to tap into gas within the "footprint" of the property.
Here is my real concern: The contract states that a metering device will be placed at the head of the well to monitor the amount of gas coming out of the bore. The company states in its legal papers that the gas is "fugitive". To me this mans there is no way to establish where the gas coming out of the bore is coming from, under the property or the neighboring property. The contracting company will not tell me where the well is going to be located IF it is to be built on this property.
As far as I can tell the company can build a well on a surrounding property and tap into the gas under the property in question. If so who gets credit for the gas?
I went over the lease contracts I have received several times and do not see the answers to the questions I have. As the listed owner of the property I believe that the company should supply me with answers to the reasonable questions I have about their operations on the property, IF I SIGN THE LEASE. RCR
The State will designate a spacing unit for the well. A spacing unit is sized to theoretically reflect the area from which the well will drain gas. Every mineral owner within the spacing unit will share in the production from the well in the percentage of their acreage within the unit. I don't know what size the unit would be since I have not worked in West Virginia in a long time.
I don't understand your concern about where the wellbore will actually be. If you are sharing in the production, why do you care where the wellbore will be?
My concern is because about a year after the contractor started to send contracts to the 200+ person who co own the property, and made payments for signing, it was determined that I was a co-owner of land and mineral rights. My first knowledge of owning land in an unexpected package containing a lease contract.
As for being "related" to the others, I had trouble determining that about eight of the names were of my male cousins whose given names are not what they go by, and I do not know the female cousin's married names. The rest of the names are nothing but names on a piece of paper.
But the contract was forced upon me without my knowledge of wither the others had worked out the contract within their group. I was told by the party "offering" the contract that I had no say as there was an agreement with the others. (Replace "offering" with "forced upon me").
During my research a few of the signees would share comments, but that stopped when I asked why they had signed in agreement with the terms and conditions. Opps! It appeared that some got to the point in the contract stating, in part, "You will receive 15% royalty" and then they went blind. They had mis-read the "You' As meaning just them, not 15% spread out over the 200+ signees. Maybe I should have written "BLIND".
It seems they failed to read that a monitoring device would be attached to the well head to determine the amount of gas passing through and that reading would serve as a basis for determining the amount of royalty. Did they catch on to the fact the well on our property might be parceled with other wells on other properties?
So my concern in regards to where the "fugitive" gas was before it was pumped out of the ground suggests yet another drop in royalties the rest did not see coming. Top date I do not know if the well on the land/mineral rights held by this group has been spaced in with wells on other properties surrounding the site. I can see how the gas would exit the ground at another location and according to the contract "we" would not be given credit.
I am just gathering information so I can brace myself when the yelling starts. As far as I am concerned about this inherited property, I have far more important things to worry about at this time. RCR
It sounds like they'll take gas from your tract and from surrounding tracts. It's going to be almost impossible to produce from an area of just 2.5 by 10 acres. It would depend on the formation, of course. Some formations allow gas to travel longer distances than others. That characteristic is called permeability. You should find out which formation the company is planning to produce, then spend some time online figuring out what the permeability of that formation is.
If what you're most concerned about is whether they are going to produce from your tract or not, you should get detailed development plans from them. They should have a map which will show you where the top hole will be and where the end of the well, or the "bottom hole" will be. The landman probably won't be allowed to leave the map with you, but if you happen to have a camera on you, well, things happen. So I've been told. That map, though, will give you an idea of where they will be producing.
Keep asking questions. Good luck.
Roger,
You should be able to go onto the West Virginia Oil and Gas Commission or whatever it is called in West Virginia and look up the drilling permit the company filed for you property. Attached with the drilling permit should be the plat that will show you the surface location and bottom hole so you can see if it crosses over property lines or not.
As to the "fugitive" gas situation, the state will have to designate a unit. Thst is the area of land they feel like the well will drain so there is no guess work.
Best,
Cameron
Thanks, glad to see that my thoughts were along the correct lines. The only info the potential lessee has provided was the written surveyor's notes from back who knows when.
Perhaps I need to explain why my entries on this board are so "Different" from what others are posting. The other posts deal with a Lessor" to "Lessee" point of view. That is only one area I have to deal with. I also have to deal with the fact I was brought into a group of people who are "related" and we come from different backgrounds.
My mother had six siblings, five born in rural WV, two in rural central Ohio. Growing up they did not have to deal with persons outside of their family and intense sibling rivalry came about. When the family moved to the "city" they found it alien and the siblings turned upon themselves, not to develop a fortified effort, but to develop an even more intense sibling rivalry. Now the Lessee comes along and (may or may not have) applied the warfare tactic of keeping the opposition separated to prevent the spread of ideas which could developed a united front. (In this case I have to lean towards "may")
I am an only child and the need for a relationship with the extended family is weak. I was drawn into contract at least six months after the main body so I do not know if the others and the Lessee talked over the contract or not. From what I have seen so far there was no discussion.
From the little bit of sharing information I have received from the family I became aware that the others were, #1 reading the contract differently then I , or, #2 read the contract incorrectly. I believe I have mentioned on the board that one of the co-owners interpreted the contract as saying she, one party, would earn 15 % in royalties. She did not realize that the entire group of co-owners is considered as a single party under the contract. What she would receive is 15% divided among the 200+ co-owners, and in this case their percentage varies. And then there is the pooling factor to contend with, etc.
I do not know how the rest of the co-owner will react but if and when royalties come to light I believe my mother's family is bound to break into HEATED arguments claiming one member did something without the others knowledge to gain more money then the others, etc.
Sibling rivalry.
Therefore I have to take "crash course" in what is involved in regards to these contracts as I find myself all alone in a crowd, even if that crowd claims to be some how related to me. RCR 12/7/2016
I just sent a post but it seems to have vanished.
Yesterday I was watching a short film on the Ohio state house here in town and it was mentioned that the building was built on a 40 acre lot. It is easy to assume that the foot print of the building is about 25 acres. I can walk the length of the building in only a few minutes.
Which in turn suggests that I am correct about the WV property I am connected to. IF the well head MONITORING is to take place on this property then gas is going to be taken out from under the surrounding properties.
Only other way I can see the well being profitable is if the gas is under VERY high pressure thereby compressing the number of cubic feet at atmospheric pressure. If that is true then West Virginia is heading for a few earthquakes...
RCR 12/12/2016