Elbert County, CO - Oil & Gas Discussion

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Comment by Jason Haack on January 7, 2012 at 3:09pm

http://www.denverpost.com/breakingnews/ci_19666830

Here is a very strong Reason why Elbert won't get a lot of oil and gas activity in the near future, need the Elbert Government on board like Arapahoe, Adams and Weld. All activity should be regulated by the State without county, city or municipal interference. Did you hear Commerce City is trying to Ban Oil and Gas? Kinda funny they are wanting this when they have a humongous Refinery. 

Comment by Jason Haack on January 7, 2012 at 10:03am

Being in the Oil business I can chime in. Essentially the leasee will send paid Landmen out to run title, curate and sign leases. They tie up as much as the geologists and reservoir engineers tell them to in a given area. Then run 2d or 3d seismic studies. Once the oil is found they decide "good acreage" and complete the lease work and start filing permits to drill. Unfortunately this is where a lot of folks are left empty handed and get released. Drilling is geology driven but also remember in Colorado where so many countys are not prepared like Elbert some Oil companies like CHK pull out because they are tired of waiting. Hope this helps those wondering about this subject specifically.

Comment by Don Jones on January 7, 2012 at 9:27am

Thanks for the civil conversation!  I don't want to upset anybody by any means, so thanks for responding in kind.  I may have over simplified my comment by saying the 'gascompanies' write there leases almost completely to thier advantage in case of situations that may incur time delays or lawsuits of any kind.  I know this only by my little experience acquired in the past 5 years here in Colo. and mineral interests in Texas.  The leases I have encountered are always heavily bent in the 'company's favor.  Anyone on this forum will tell you that.  Read Buddy Cottons and others posts that have been in the oil business for a long time to get some good incite.  My opinions come from that info and other reads. I don't think 'gascos' tactics are always appropriate,fair or acceptable from my limited knowledge, until I understood from whence they come.  That is why we (Leasors) NEED to understand as much as possible about what we are getting ourselves into before we get into it!! That is my view in a nut shell.  Some people "anticipate payment" for what they did BEFORE they research what they are doing. DO NOT put too much trust in a 'gasco' or seismic company that wants to do something with MY PROPERTY above or below the surface.  There is NO GUARENTEE that a payment is going to be made in the time period SET FORTH in my leases UNTIL IT is paid out.  If it does not get paid in set time in agreement then it is null and void.  Unfortunately, you have to, sometimes, make the company  void it because more than likely THEY won't make the effort.  I was not waiting impatiently for a check like some of my neighbors were doing.  I felt comfortable with my agreement with the company(Chesapeake).  If a well produces near me to my advantage, fine.  If nothing happens,  my life does not come to mental anguish or financial end.  Go into contracts with confidence that you covered yourself and get help if you need it and expect ANY possible circumstance and understand what you can do about them before they arrise OR don't sign a lease.  FIGHT the oil companies UPFRONT.  NOT after you get yourself into a bad situation.  This is my rational side of my brain speaking to these issues because the other side doesn't fit here.  My wife and I have worked all our lives to get what we have to risk any of it to anybody or anything inside our control. Thats my other side!

Thanks to all

Don

Comment by Wilsontownship on January 7, 2012 at 3:13am

DON JONES SAYS:  As far as the Reuters article, I have seen a similar article elsewhere and actually don't see much of a problem with what these companies have done. Sorry! They have made a 'one sided' lease as we have all seen even here to thier favor.  If THEY don't pay a bonus in a stated period of time ( like 3 months) the lease is null and void.  Now, trying to get them to release the lease from county record if it was already recorded is another issue. Nothing was taken away or scammed in my opinion. The only thing that happened was someones hope for $$$ was dashed. That might be sad but not criminal.  Leases and permits all need to be reviewed and understood before signing or anyone can misconstrue the legally binding outcome as a scam or tragedy. Just my opinion maybe because I don't just sign for the $$ signs.  Thanks, Don 

+++++++++++++++++++++++++++

you aren't possibly suggesting that because this is a tactic used by gascos that it is appropriate, fair and acceptable are you.

what a shame to think we could reach a point where we simply think a business can treat us however they choose.  In the case of a lease being cancelled for anything outside an incurable title; such as don't own minerals __ then shame on us.

typically a landowner signs a lease fully anticipating payment of the sign bonus.  The only part of the lease that isn't a guarantee is that royalties would ever get paid.

it is unfair for a gasco to lease aggressively, lock up acreage and then later decide which parcels they truly want _ if any.  In so doing, a gasco takes a landowner off the market making them unable to sign with a company that DOES intend to pay.  Imagine as you were soliciting offers that one company said we may decide not to honor our lease at our discretion - would you sign with them?....NO.

it is up to lawnowners to push back and fight these practices even if that requires legal action or even legislation.  Lets warn landowners of these tactics and then all of us make a stand against the gascos and require them to operate in a fair, honest and legal manner.

and Don, we will find out in the Michigan legal system if Chesapeake was operating within the law.

Wilson

Comment by D Moeller on January 6, 2012 at 10:23am

I had signed for $500 an acre plus royalties, etc and they filed it. Then they came back and said were only going to pay me a portion of my actual rights. The paperwork they filed said the paid in full and after almost 6 months of fighting with them (they paid my neighbors 100% and said I was only entitled to 40% and all lots were sold as a pkg in 2001 before being re-plotted so it aint rocket science to research) we demanded to be released. The agreed to, and 3 months ago promised my atty they were pulling the filings and supplting a letter that they had released me. . I'm still holding my breath for that.

I would go slow with approvals of access.  .they are no longer in a hurry to drill, so I would take my time in approving access in the winter or Spring with as muddy and "snotty" as it can get around here. .you might end up with "a new road" courtesy of a lead-footed guy in a seismic truck (LoL). I'd be more concerned about damage than the $7 an acre ! LoL
Call the State (you can do it online too) and verify they're licensed in the State. Maybe they even provided a lic #?

Comment by Jason Haack on January 6, 2012 at 9:34am

Geokinetics is a real company being paid by lease holders and they are definetly not a shell. Not sure why they won't pay the $7.50 per acre, seems quite trivial given the fact they charge $45k per acre to the client. The liability issue you brought up is interesting and I think you have a very valid concern.

Comment by Don Jones on January 6, 2012 at 9:23am

I forgot one more point.  Geokinetics can be considered a shell company working for the interests of 5 other companies can't it? They do thier job of seismic study but to the legal and financial criteria set by these 5 companies. They also want to enter the property to survey the property Before they lay seismic signal retieval cables AND before they will pay.  What's with that ?

Don

Comment by Don Jones on January 6, 2012 at 9:16am

Thanks for the responses! I'll keep looking for the info on the county website. I'm assuming the seismic info you are getting comes from COGCC?? I'll look there too.  If you(anyone) have not seen the "Permit to conduct geophysical survey" from Geokinetics I'll be glad to try to show it here.  My point was/is that this "permit" is like any other binding contract that should be to the Permittors favor but is inicially not. Granted, we are not going to make money nor are we trying to on this contract but there is no stated position of assurance they will FIX anything that may occur by there actions(seismic thumping). Payment stated of $7.50/acre is not enough to pay for a gate let alone a well casing or foundation crack or some other unforseen damage issues. Granted this stuff rarely happens but it has happened so why not make sure it is covered in this contract? The indemnity statement is also very simple and vague and there is no specified length of time this permit is to be in effect ( like 1 yr.).

As far as the Reuters article, I have seen a similar article elsewhere and actually don't see much of a problem with what these companies have done. Sorry! They have made a 'one sided' lease as we have all seen even here to thier favor.  If THEY don't pay a bonus in a stated period of time ( like 3 months) the lease is null and void.  Now, trying to get them to release the lease from county record if it was already recorded is another issue. Nothing was taken away or scammed in my opinion. The only thing that happened was someones hope for $$$ was dashed. That might be sad but not criminal.  Leases and permits all need to be reviewed and understood before signing or anyone can misconstrue the legally binding outcome as a scam or tragedy. Just my opinion maybe because I don't just sign for the $$ signs.

Thanks, Don 

Comment by D Moeller on January 5, 2012 at 1:38pm

Great article, Kevin !

 

They've started to Frac (Nov '11) in the well just North of ElkHorn subdivision (about Co Rd 13 and Co Line Rd (194))

http://www.niobraranews.net/hydrofracking/field-report-fracking-sta...

Comment by Jason Haack on January 5, 2012 at 12:32pm

I think they did and add on and pushed a few sections south of 7,8,10,12 I see they are in Adams and Arapahoe as well and all that combined is about 400 Square miles so about $18M for this study, WOW!!!! ($45K per square mile estimated) 

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