Fracking

My parents own 3 empty adjoining lots in the next parish over.
About 2 acres total.

Been a lot of controversy on the news lately about a fracking company trying to get permits
to drill in this parish and the residents fighting it.
Then today I hear the state has just issued a permit for a test well to be dug.
Said well will be on a 3 acre site less than a quarter of a mile up the road from these lots.
I called my parents and they have not been contacted by the drilling company.

Other than being SOL for selling said lots because no one wants to live next store to a oil well
What can we expect now?

Who has the oil rights for the three lots? Drilling that close you should have some rights unless they were not included in the sale to you or your parents. A little $$$ makes the smell non existant....

I'm sure there will be Town Hall meetings set up soon by the Energy company to explain things and answer questions.
Just remember, the Complainant always has the burden of proof.

Have your parents rent the lots to the drillers/frackers and make some money off the deal. If they are bare lots they always need storage areas, if they have houses the people always need places to rent.

That was my thought exactly.

Our Napoleonic law system is different than other states.
Mineral rights stay with the original land owner for 10 years from the
last production date or sale of the land which ever is longer.

Since there has been no production in the area for the last 10 years
And my parents have owned the land for well over 10 years
My parents should own the mineral rights.

With that said I do not figure the payments would be much on such a small plot of land.

They are 3 wooded lots.
1 lot on one street and 2 lots that back up to this one on the other street.

The lots would need to be cleared to rent them for storage.

It's worth checking into. Just trying to help and if your area is anything like mine the gas industry has helped our poor struggling coal busted towns. Towns have money that they never new they could have and new roads are being paved all the time.

I really don't understand what all the fuss is about... people here been screaming about it for a couple years now because it's going to 'contaminate the ground water'. I've yet to figure that one out when you got a hole 7000 feet in the ground... but anyway.
I don't imagine your mineral rights will be worth much either. They'll just drill 10 holes radiating out horizontally from where they set up and take everything under the ground for quite a stretch.
I guess if you had clear lots I'd say rent them or sell them to the oil company and get something out of it. Otherwise... I don't seem much else happening other than a lot of complaining.

Rod

Depends on the output of the well as to $$$. Usually a well acreage is 20 acres, ie, one well for every 20 acres. If the three lots were one acre, then the income could be 1/20th of 1/8th. 1/8th being the usual land owners share of a well.

FWIW maybe.

I realize you are just trying to help.
And thanks for the advise; I will have to check into it.

We know full well how the gas production industry helps.
Most of the oil our country uses passes right threw my state.
I am not against the drilling
Just looking to see what I can expect from a well so close by.

Thanks Roger
I am really getting ahead of myself on this as the permit is only for a test well to see if a real well is practical for this area.
New permits would need to be gotten to drill a real well.
Just trying to get advise I can tell my parents now in anticipation of a real well being drilled in the future.
My sister is the one that told me about the test well permit.
She is thinking we are now stuck with 3 lots that can not be sold as no one wants to live next to a producing well with all the trucks and noise; and very little income from royalty rights due to the small size of the land.

Rod
I am not against the drilling and the land has city water but I realize a water well is no problem.
Just based on the couple of comments so far I am inclined to tell my parents to rent or sell the land to the oil company if a real well is proposed.
At least they can get something for it.
Just the kind of advise I was looking for as I had not thought of that.

Find the head company thats doing the drilling, i.e. Chevron, Range Resources, EQT and try and approach a land man. Thats what they are called. Thats the route I would go.

I'm undecided on the Fracking issue, I checked a DVD out of the library that had a lot of horror stories, ie water wells being contaminated with gas. They showed a kitchen faucet with fire coming from the spigot. They also showed water wells that had gas vent stacks that werre ablaze. in the 1950's I actually witnessed a water well near Lake Charles that would loose its prime due to natural gas entering the well. The water from the pump would stop flowing and vapor would flow from a garden hose, we placed a lighted match near the hose and it burned with a soft yellow flame.
I was told there are devices available to overcome the gas invasion.

I also checked out a DVD on wind turbines with a lot of horror stories.

I purchased a two acre lot here in BR in 1977, the seller retained the mineral rights, I sold the lot in 2003 without ever receiving any notification that the mineral rights had come into my posession. I suspect nothing is automatic and that I probably should have taken some action to secure the rights.

John in La- I just leased my farm oil and gas right two weeks ago.

I do not know how big a lot is in your parish but in a town around my area a lot is about 100 feet x 200 feet(that is big). Are you talking about this size? If so any royalties will be negligible.

Roger in Iowa- I don't know how they drill in Iowa but, my driller told me he can drill down a couple thousand feet and then turn his drill horizontal and go another 5000(thousand) feet. He must allow a buffer of 320 feet on each side of his horizontal shaft. So, that will be much larger than 20 acres(I did not do the exact math and I could be wrong but I came up with roughly 72 acres for the horizontal line). Unless, you are talking about the Pod/derrick area only?

RodInNS- Here, if the driller goes underneath your property from those 'radiating' lines the driller must pay a % of royalty to you. It does not matter where he drills from or how deep he goes.

Driller knows exactly where his drill is.

If JohninLa has small lots and they are drilling underneath his lots...he will get a small percentage oge of the royalty.

Please understand, this is only pertaining to the laws in my state. That is where I based my blanket statements from.

My 2 cents.

That DVD with the flaming faucet was proven to be fraudulent.

Although what you described does happen - a shallow water well might also hit gas; that has nothing do do with hydraulic fracturing a mile underground.

If there going to sell the lots, which you said are wood lots that need to be cleared, if there is any value in the timber have it logged first than sell the land to the gas company?

That sure is a correct statement. When those dollar bills start coming in its a different ballgame

JayinNY_ I agree with you, sell the timber but, John said it amounted to about 2 acres. Might make him a little money.

If the drilling company has already gotten permits to drill a 'test' well , then they have usaually mapped out wher they need to aquire the the leases from. This late in the game it seems that the oil company already knows which property their wells will cross.

It has happened in my area. The drillers started coming in here about 5 years ago offering to buy your mineral rights. I refused just because I'm stubborn. All my neighbors leased to them. Funny thing, each of my neighbors leased to a different driller. All drillers were 'land locked'. Now, some of the neighbors are coming together and going with one driller.

I'm told, once oil reaches $65.00 a barrel (WTI), they will start drilling and pumping again.

My fault, I mis read his post. I thought he said he had 3 2-3 acre lots! Oops

its the lose of the chemicals they are injecting down the well casing during fracking that I am worried about if they start fracking in western NY. Bill

Greg;
Yes I said wooded but what I really meant was not cleared.
There are a few pines of market value but not enough to justify a logger bringing all the equipment in.
Maybe 2 loads of 16 foot plywood logs at the most.

I knew they were talking about drilling in the area just did not know where.
I would have thought the driller would have contacted my parents already but they have not.
Since they are the only ones with a permit; had to jump threw a bunch of hoops to get the permit; they may be waiting for the test well results before contacting owners with lease terms.
Heck the permit ink is not dry so we may get a letter any day now before the test well is drilled.

You won't have to find a Land Manager, He or She will find you prior to any work beginning in the area.

I have no idea how mineral rights work there. Here, all mineral rights are held by the crown and the leases given by the government and royalties paid to the government...
Even supposing he was paid a percentage of the royalty for what was under that land I'd expect it to be small given the nature of the small area...

Rod

John in La- In my area, the drillers won't even let out that they are even doing a test well unless they have already secured the leases of the lands that they want to to drill.

Why would they drill a test well to see if it produces when they haven't procured the rights to the properties?

It's kinda like, Okay, I'll drill the test well and if it produces then I'll buy the leases? It does not work that way.

As you said in a previous post, you/parents own ~2 acres of property. That is a pittance to drillers.

Obviously, if your property was important to the drillers, they would have already contacted you about purchasing a lease. They know where the drill goes and what they plan to do. 1/4 mile away from your property frees them from the "320 foot Buffer zone".

My suggestion...Do what I'm going to do this year. I have some property in a city, I hope to find a charity to donate it to and take the tax write-off.

RodInNS- isn't that what I said in my second paragraph to JohninLA? ...." If so any royalties will be negligible."

I did a seminar on drilling and fracking over a year ago.
If you're interested, Google. Muhlenkamp and Co. Inc, Go to "what we're seeing". And. "Natural gas, a energy game changer"

John, I am up here in NW Louisiana, smack in the middle of the Haynesville Shale (gas). Before the Haynesville discovery was made public, the leasehounds came around and locked up every inch they could. As there had been very little exploration and production in the area for many years, they were able to convince many of us property owners to sign a sucker lease (minimum royalty, minimum lease bonus). They told us that they wanted to lease up some areas just to "possibly, maybe, someday...." see if there was anything there. Within two or three months the news leaked out that we were sitting atop the largest (at that time) natural gas pool in the nation. By that time they had the majority of the prime tracts locked up, but from then on they had to pay through the nose for the remaining acreage. The late signers got up to 100 times what I got.

So, if your parents' land has any value to a producer, they'll hear from them in time. They shouldn't jump at the first offer, nor should they hold out for pie in the sky. In any case, three lots won't generate a lot of royalty, but if the prices (oil and gas) get back up, you might be pleasantly surprised. In their case, though, sale or rental might be the better option.

In Louisiana production is governed within a "production unit", which is defined as a section (one square mile). So, your parents' property will fall within a production unit if one is put together, regardless of whether they lease. Within that section up to eight wells can be drilled. That used to mean eight different wells in eight different locations within the section. Now, with directional drilling, they can drill and produce an entire section from one drill site. Unfortunately, with the price of natural gas hovering at almost historic lows, there's not a lot of drilling going on. Those of us who have producing wells are seeing our gas being sold for two to three dollars per thousand.

Just a comment about the fracking thing: I'm surrounded by hundreds of gas wells in my area, including three 1,200 feet from my house and my well, and all of which are situated above the Carrizzo-Wilcox Aquifer. I have heard of no water quality problems resulting from fracking. I was much more concerned about the drilling companies drawing massive quantities of potable water from the shrinking aquifer to carry out their fracking operations.

John, as long as they do their work properly, you will be fine. Do not believe all the hype by the anti groups that are backed by out of country oil companies.