Elbert is a ways off from drilling so don't worry.
But to answer your question there is nothing you can do to prevent a leasholder of the mineral estate from developing. The state can and will force you to take a median sum for surface use and damage fees.
My suggestion is you pay a land man a small sum to run title on the 35 acres. I can give you a great lead on a great landman (former lawyer, AAPL) and he is very reasonable. PM me if you want his info. You never know and i have seen it many times people buy properties and never realize they own the minerals until a Oil company comes knocking at the door. And also i have seen many folks buying propertys to find out they do own them from last sale becuase the previous owners claimed to have them but really didn't.
Thanks for the information. That is good to hear (at least from my perspective) that Elbert is a ways off. I will PM you once accepted. I may be interested in finding out more. In my case, pretty sure the current owners do own the mineral rights and have indeed officially leased them to Blanca Peak.
The leases Chesapeake and land agents for them presented to people in Elbert Co. were pretty much the same as the copy you have. Any stipulations on Exhibit A override the same language of the lease. There were some people that were able to negotiate better terms with Chesapeake (very few) and others that signed with ConocoPhillips got better terms, especially when negotiated by an independent landman or oil/gas attorney.
In reading the lease, I would say that the lease would terminate if there is no activity by the end of the primary term. If you buy the property, you should keep abreast of any activity in Elbert Co. through the COGCC website. The property you are interested in could be included in a larger pool of acreage (without actually drilling on that property) as a spacing unit. The oil co. holding the lease would have to actually start drilling in that spacing unit before the end of the primary term to extend that lease.
Articles 11 and 12 state some surface use provisions that you should be aware of (Exhibit A also states a couple, one with the provision that the current lessor owns the surface when drilling commences). Also read carefully language pertaining to assignment of either the surface or minerals. If you are nervous about the lease, you could have an oil/gas attorney look it over and advise you on your rights. Since the minerals are being severed from the surface, an oil company would try to enter into a surface use agreement with the land owner before drilling on that parcel of land. If you buy the property, you should hire either a reputable independent landman or an oil/gas attorney to represent your interests in negotiating with an oil company for surface use.
In being interested in the property, you can state you want all information on any mineral leases and reservations of mineral rights or royalties to the real estate agent. Good agents can use a title company to run title to find this information out before going to closing.
The best you can do is go into any purchase with your eyes open. Best of luck to you.
I am new to this so please bear with me. I quietly attend meetings in this county. From what one would think, based on attendance there are NO mineral owners in Elbert County. The same 20-25 ANTI oil and gas folks show up at every meeting. Mostly planning commission meetings. They seem to want to strip everyone of their rights to their mineral estates. They have the ear of the planning commission and even a couple of folks on the planning commission seem to hate the idea of exploration. Unless some other view points and people who have different opinions start to show up to these meetings to educate these people on what your rights are as mineral owners -- you might want to kiss them goodbye. It is a sad state of affairs when in a county who claims to be 70% conservative, the only people who show up to meetings are the 20-25 radicals who want to tell us all how we should live. None of them wants to take responsibility for KNOWING that someone else owned the sub surface rights when they bought their houses on their little five acres. I am disappointed in Elbert County right now and I am sad that we are letting a fringe group of extremist new comers shape our future. I am one. I cannot stand up in these meetings alone. The only person who was at the last meeting with any sanity happen to be a man from Wisconsin who owns some land in Elbert County. We aren't even there in mass to defend ourselves! We had better get off our butts and get involved.
John really good post. I agree i have been working with the Elbert County planners, commissioners and neighbors for a few years now and when the planning committes set forth rules and regs for oil companys i felt we were close but same old whacko group was there saying the sky was falling. I think we need to reach the mineral holders becuase the land owners may be 70% conservative but not own minerals and don't speak out becuase it wouldnt benefit them
Also John i can tell you the state leasing has ramped up big time and so has the private so don't worry it will happen and my guess is sooner then the anti oil people want to beleive. We are as close as we ever have been.
You are correct -- I am very familiar with the CGOCC and the LGD process. The new baseline water sampling, the new setbacks, the new comment periods...etc. But this group WILL derail this process. I am a lot closer to some folks on the "inside" than I care to detail and they are doing everything they can to thwart this. Don't believe we are "closer" until we are THERE. I assure you these people are not going away and they MUST be out numbered. They simply will NOT believe that the CGOCC can and/or will enforce the rules. They will not believe official spill reports and blow everything out of proportion. So please pretend we are no where near the finish line and get out and help. The reason I am on this forum is to try to reach the mineral owners. Please spread the word as best you can for owners to show up at these meetings and stop the chicken little process. The guy from Wisconsin pointed out that he didn't see a single bicycle in the parking lot and each one of the hypocrites drove themselves to the meeting...
John, thanks for posting. I too have attended the early planning commission meetings when they were first starting to develop O/G regulations for the county. There were a few people there that were pro-mineral development, but not as many as those against. I contributed my thoughts and to the planning director's (he is no longer there) credit, they were taken into account. An "editing committee" was formed to develop county regs and an MOU alternative, which I thought was a pretty good document when finalized. They took into account oil company's comments, as well as including the COGCC liaison in their meetings. For some strange reason, the commissioners didn't like the document presented to them, stating the regs were too strict and greater than the state regs, and really not taking into account the MOU process that could be negotiated. They have since hired another planning director (who doesn't seem to know very much) and refuse to acknowledge the editing committee, saying they are developing a new MOU process. They are not being transparent about it and this has led to overall mistrust from the citizen's, bigger voice from the lefties, and disgust from the conservative side. (somewhat mirroring the national climate, IMO!) I agree with you that more conservatives need to attend the county meetings again and speak up. I have heard from more than one oil type person that Elbert County better get it's act together soon.
The county has differing opinions based on location. Most of the ranchers in the eastern portion would be pro O/G. The smaller land owners in the NW portion of the county, not so much. Unfortunately, Chesapeake was the first company people had exposure to, which left a really bad taste of O/G right off the bat. For the most part, people are distrustful of big oil and scared that the production process will destroy their way of life (clean air, quietness, good water, wildlife, etc.). Early on, I was asked to speak to large groups of people both in Douglas and Elbert Counties to portray the truth about O/G and leasing issues. It helped calm the climate somewhat, but people need more education.
My stance is O/G would be good for the county and individuals, as long as you protect yourself with good lease provisions and acquire education on the production process. The left incites fear with untruthful statements that helps no one.
Good day Debbie,The reasons behind the no vote are a bit confusing -- I am not clear on what the REAL issues were -- just what we are told. Maybe it had to do a bit with in-fighting between male egos on the planning commission and the new BOCC. But we are where we are. So we do what we can do from here? I would recommend that you actually meet the new planning director. The mess that was dumped on her was none of her doing and neither the BOCC nor the Planning Commission are doing her any favors. I wouldn't take that planning director job for anything! I have had a few chances to talk with her, she is pretty sharp. She has been pitted between the groups and is doing the best she can under the circumstances. I think first we need to allow her to do her job. THEN we can pass judgment. As for the "public process" and the secrets you allude to is just not true but I understand why you would believe that. I would believe it too unless I had prior experience in the actual process in a former life. The process is the same as the process before. The previous director created a draft as any normal amendment is drafted. It begins as an internal "planning document". That is normal in planning. It THEN gets turned over to the planning commission for the beginning of the normal public process that includes hearings. That is how all regulation is drafted whether it is local, state or federal. The board of county commissioners seems to have issue with the people and the personalities on the former 'editing committee' and they were selected by Richard Miller. As I write that maybe that is one of the issues the BOCC had with it.I have read so much about "sunshine laws" in our local rags and it is also clear that they don't really understand them. These laws say that no DECISIONS can be made or strategies formed behind closed doors. It means that whenever a meeting of a formal public body is happening the door can't be locked. It doesn't mean that staff people have to allow anyone to walk into their offices while they are working. One of the other nuances that those from the outside don't seem to grasp -- and I only have a partial grasp because of work I have done elsewhere -- is every time you create a "regulation" you create the need to REGULATE. With a really limited staff and a worse than awful budget we need to realize that our county's ability to be the "land police" is really limited - I see simple zoning violations on a daily basis. Just drive around for an hour. The state regulations are actually very strong. If our county was to say just require a permit and an MOU with bonds for our roads and a road agreement for all operators and allow the state to regulate it -- then the policing part is also on the state. As citizens we have a direct line to the COGCC (they are taking us more seriously than ever - I have gone to some of their meetings around the state too) and if we see something we don't like then they are required to respond. We don't even have a code enforcement officer -- that is left to the few staff people the county has… So the more unique rules we create the greater the need to police it. What I have seen about this particular planning commission though is that there are two very strong personalities and I fundamentally disagree with their ideology. They are supposed to be neutral and that isn't how it feels to me. I don't agree with their agenda. I, as a voter, didn't elect these people, I elected the BOCC. So in a sense I feel more confident that the BOCC has my interests (mine personally) in mind than this particular group on the planning commission.
Debbie - Could you tell me more about Chesapeake Energy? Or is it here in the forum for me to read about? I see some posts and I will read them first and then ask questions.
I agree the BOCC has made the issue a bit confusing. I have not been to the recent meetings, so only can comment on what I have heard. The reason given to me for the distrust that the document they are in the process of creating is being created in secret was the BOCC stated at the last meeting that when the document was presented to the BOCC is when the public would be able to read it also. After reading your post below, it sounds as if they will go through the normal public hearing process of the planning commission before presenting to the BOCC. I hope that is the case. I know several people had hoped the election of the current BOCC would be a lot more transparent and upfront with citizens than the prior BOCC. I agree with you also that the new planning director has a tough job and the BOCC and planning commission are not helping. The old planning director did not select the editing committee though. They were all volunteers and became the group that continued to meet. To my knowledge, all their meetings were open to the public. I attended a couple of them. The room was pretty full of interested parties, oil companies included. I thought the document presented to the BOCC still had a few too many regulations and needed a bit more work. But, thought overall, was pretty good and much better than when they started. It seemed to me the MOU process was good; the regulations seemed counterproductive when they stated that they all were negotiable. I thought at the time, then why state them as regulations. Just list them as best practices for the county or something like that. I, like you, thought they should direct their energy to creating bonds or fines for roads, violations, spills, etc. You correctly pointed out the county doesn't have the personnel or funds to police anything. That question was asked at one of the planning department meetings, and it was stated that people would have to be hired, probably in the planning department. You are right that the COGCC has become more open to citizen comments/concerns, which is a welcome improvement.
I hope you are right about the BOCC. I was starting to think they were turning into the old BOCC very rapidly after talking to some people that have attended recent meetings.
I'd be happy to answer any questions you have about Chesapeake's behavior in the county.
That is an interesting point you make Debbie about the "selection" of the editing committee. They were the people who "showed up" and continued to show up. My dismay is that the only people who continue to show up to any meetings are the "anti" folks and if that is the case then they are the same people who ended up on the "editing committee". That make much more sense based on who I have been told was on the editing committee and the few I have met who were on it. They are not folks I admire much. To me though, that is in part who should be on the editing committee -- citizens who care plus some experts in the field. It seems to me right now the only citizens who care are those who don't want oil and gas. Where are the rest of the folks who care but care about different points?
If people are going to be "hired" I wonder where the money is going to come from. I have heard about our budget and the short comings in the assessor's office (lack of personnel mostly). Elbert County hasn't the staff to properly even assess the new homes or improved homes to increase revenue and they can't do that until we increase revenue. It is a crazy situation. Oil and gas may be a boon and it may not amount to a hill of beans. But until we have an idea of that we have got to keep trying. I just went to the COGCC website and looked up all the new rules -- they are pretty protective and then look at the federal and EPA requirements and these guys are pretty darned heavily regulated before they even enter the county. Take care of our roads (Elbert County), pay for what you hurt damage (Elbert County), clean up whatever you spill (if you spill) (State and Feds), reclaim land when you are done with it (State), follow the rules in place and we are pretty darned good.
There were a couple of experts of the field that were there in the very beginning. They said their peace and didn't come back. Me included. There were also a couple of pro O/G people that stayed on the committee, Paula Koch and Grant Thayer, who were also on the planning commission. I didn't have the time to spend on it at that time, nor do I have a lot of patience with the "anti" folks. They spent A LOT of time on creating that document. The first one was horrendous. I went to one of the first meetings to say that if they went forward with that document, the oil companies would flee from Elbert Co. Richard was shocked at that news and they did tone it down after that.
I think their thoughts on hiring were they would be getting money from the oil companies by that time. Not sure much thought was put into that.
The new rules the COGCC have are good and much better than before. I would like to see a few more things, like closed loop systems and maybe light, sound and air protections when in close proximity to homes. The better oil companies do that as a norm when they are close to subdivisions. But, regs are really for those that tend to cut corners as much as possible and not be as responsible as others. The oil companies that were present at the planning commission meetings did not have a problem with those types of things. They did have a problem with the setback rules. I suggested the planning commission should compromise on that, but they left it in the document.
That Elbert setback as written makes little available development in Kiowa and Elizabeth and are way over reaching in my view. Closed loop fracking is preferred as most operators will take there flowback and recycle for next frack. The drilling and development time for even a 2 mile long lateral is all over in a few weeks so safety measures like light for the crew should never be compromised, I also know the monitoring of gasses and air is a huge priority to the Operators, it's all about safety. My problem with anti OG folks is all they every do is watch movies like that little punk made Josh Fox and never watch the "Counter movie" like Frack Nation to get both pov. There MO is always fear mongering and end of days mentality but still buy and use plastics everyday and then drive there 14 mpg SUV to the meetings. Elbert has Oil and alot of it, Elbert also has it's own OG severance tax which could help the whole county and everyone that lives there tremendously if oil starts flowing. Its kind of sad to think of some of those Elbery folks i have met that would love to live better lives if Oil could flow from there Minerals.
Chesapeake leased some for very high bonus to get in Colorado, they felt the missed Weld and they really did. But they also Defaulted on thousands upon thousands of Acres in Elbert then got tired of waiting for Elbert to get rules in place and sold off all legitimate leases to a few buyers. There is a lot of leasing going on for probably 1/10th of what was being paid in 2009 but that really is the value.
Hi Jason, you are correct -- the anti-gas and oil folks are driven by extremist propaganda. I have talked to and met with operators to get "their side" and safety for both people and the environment are HUGE for them. The costs of NOT being safe are astronomical. They don't "cut corners" to save money -- cutting corners can COST them too much. Where you are wrong is that Elbert County does NOT have a severance tax on oil and gas. They were for whatever reason exempt from it when the first "sales and use tax" was voted on (blame some former commissioners I guess). We will vote this November on removing that exemption. We currently make NOTHING other than permit fees off of oil and gas in this county. So I suppose this is a call to get out and vote! This county is running on fumes. I attended a presentation in Simla about the new mil levy being proposed. I am a small government person and hate taxes but I see that if we don't do something our roads will go unplowed and don't even think of calling 911. We have too much ag land that isn't really "ag". People are living on their 35-160 acres and tossing a cow or two on there for a tax break without being in a true agricultural business. We make pennies off that land and the roads have to be longer between fewer houses on bigger parcels. It is a really bad recipe. County staff is at bare bones and most people -- love em or hate em -- that work at the County are doing two jobs to the best of their ability under pretty lousy conditions for crappy pay. We have a hard time retaining people. Talk to road and bridge. We get newbies who come learn to be operators in Elbert County and once they have experience they leave for a GOOD job elsewhere. Even if oil and gas is a hit the income from that is a couple to several years out. What do we do in the meantime?
But back to oil and gas etc. The commissioners want something passed that doesn't overly regulate oil and gas by being redundant (they are heavily regulated already) and does not conflict with state law. I understand that a draft might be seen soon. We will see...then our planning commission gets it and God only knows what will happen then, these two groups do NOT like each other. I am more inclined to support the guys I elected than I am to support some people who were appointed --especially when I see that they have personal agendas and they pander to the crowd of 25 people who don't like the nasty oil and gas companies but love their SUVs. I have heard this said and it is true -- unless we get involved the tail IS wagging the dog!
That's interesting that Elbert Co. doesn't have the severance tax on O/G. Is this something they just found out? The county commissioners stated in a BOCC meeting that Elbert Co. did have the severance tax a while back. We haven't had the sales and use tax in the county very long. I thought all counties in CO had O/G severance tax.
I have seen from Crimson Exploration and operator of some stripper wells off 21 a Elbert Severence Tax nearing 9% so I respectfully disagree with John on that one. But i do agree on all other points and appreciate the post.
The other "severed" tax in Colorado is on the physical estate. Which one is John referring to? It doesn't seem to be the counties' choice to exempt receiving it. I'm late on the conversation but have been reading it all.