Calling the top in farmland right here

[Taiga]

Not surprised you have no response!
Ya oil companies moving in sure does drop those land prices. I mean who wants 15,000. A quarter for nothing. Hahahaha
Have another puff.

Yep, take your $15,000, lose 25acres out of your quarter to a multiwell pad with 16 wellheads and facilities. Of course add in two years of non stop heavy traffic while it is drilled and completed.

Yes these current multiwell pads are 20-30ac in size. Just the pad, plus road. Think about how big that is! No more teardrop access just around a wellhead and riser while you still farm the rest.

Now you have a heavy industrial site on your property. Who values the highest $/Ac for land? Farmers? Nope, residential value. Now your property is worth zero to those potential buyers. And they didn’t care about number of cultivated acres, those rock outcrops, that wetland. That is what gave your property that ‘rural home appeal’. But, they don’t want to live next to that heavy industrial site.

Now the land is only worth its cultivated value, and only to a handful of local farmers. And now the farmers deal with the weed infestations, the garbage, the traffic, the spills. Life is great. And all that money.

Please send me your address so all the oil companies that I take to the Surface Rights Board and arbitration, where I always win, I can send them over to your place. They love dealing with suckers like you and they can pay you pennies for your diminished land value while you think you are cashing in. Have another puff buddy.

[the big wheel]

Yep, take your $15,000, lose 25acres out of your quarter to a multiwell pad with 16 wellheads and facilities. Of course add in two years of non stop heavy traffic while it is drilled and completed.

Now you have a heavy industrial site on your property. Who values the highest $/Ac for land? Farmers? Nope, residential value. Now your property is worth zero to those potential buyers. And they didn’t care about number of cultivated acres, those rock outcrops, that wetland. That is what gave your property that ‘rural home appeal’. But, they don’t want to live next to that heavy industrial site.

Now the land is only worth its cultivated value, and only to a handful of local farmers. And now the farmers deal with the weed infestations, the garbage, the traffic, the spills. Life is great. And all that money.

Please send me your address so all the oil companies that I take to the Surface Rights Board and arbitration, where I always win, I can send them over to your place. They love dealing with suckers like you and they can pay you pennies for your diminished land value while you think you are cashing in. Have another puff buddy.

Hahahahaha
Let's see I ve never needed to go to any board but sounds like you live there because you never read trumps book on the art of the deal before you signed up with the oil companies and I m the sucker? Hahahahahaha

If you can't make 100 bucks an acre right off the top before you put seed in the ground work then likely farming isn't for you maybe start a consulting firm on how to sue the oil companies sounds like that might be the one thing you yiur good at. Hahahahaha

Oil companies deal differently with whiners and panzis then those that keep things up and up day one.

Have a great puff!!

[helmsdale]

Short of a major liquidity crunch in the broader market forcing investors to realize the cash value of their assets to cover other positions, I find it more likely land values will simply stall.

Only other thing I could see is if there were no willing renters. Lots of operators struggle to effectively manage what they have now around here, but if someone shook another 1000ac in front of them they'd think it a no brainer to take on more acres to spread their costs out further... so until some sanity is injected into the world of greed, I don't really see this as a distinct possibility.

[Ache4Acres]

Saskatchewan changing its land ownership laws is the major reason for the large rallies in farmland prices. Open ownership laws also helps stabilize the current higher values. Land prices in Alberta have been very high compared to farming economics for the last 50 years. Doesn't seem to adjust down much even when the farm economy sucks. Don't see prices dropping much in Saskatchewan either now that the doors are wide open. Land prices were way too affordable for way too long in Saskatchewan as compared to other places. Makes it tougher to afford, but stable high land prices keep creditors much happier.

Sask land ownership is not wide open. Canada only. Sure there are creative ways that few find around that, but foreign money goes outside the prairies

[checking]

Sorry big wheel, should have asked you what you are giving up for that 15 G annual payment.

Here, no one gets $15,000 for a 4 well pad which is what is needed to drill out a quarter section. Perhaps you were talking a 20 acre pad with 16 wells as taiga mentions, and then I consider you are seriously getting shafted by accepting $15,000. Single independent leases of 4 wells, here, yes $15,000 is very possible. For a 4 well pad, though, you had better be holding a seismic access card back, and a number of critical quarters of ownership that they desperately need information on for a best well chance drill for them. You can then hold firm that you will not accept pad money of $750.00/additional well drilled beyond the first well. Or, you can tell them that you are not interested in anything except independent one well/lease money, go away, or anything in between. That doesn't mean they will go away. They may decide to gamble drilling off of well control, if it exists, or throw down enough verticals to achieve well control.

Typical four well pad, first well to establish annual lease is $2100.00, plus $350.00/acre loss of use. First well takes a 120 X 120 meter lease to accommodate everything needed to drill a horizontal well. All additional expanded wells only take a part of an acre, or an acre as they use a lot of the first well lease.

Worst thing going is "land sterilization". That is what oil companies call buffer zones around their pads. Pads limit surface area damage. You get to farm more, but pads limit what you can do with your land, besides farming it. Each pad come with a satellite testing facility, usually on a skid. Sk. government wants to know exactly what volume of fluid, and gas comes out of each well. Have one of those suckers, and you can kiss off a 500 meter zone around the pad. Worse, these things can be on a pad right up against your property. You get zero dollars, and they have effectively sterilized your subdivision potential, and your development potential.

$15,000/year to zero dollars just doesn't seem enough to want to be around oil. Something like that cost to benefit ratio you should all be up in arms against.

[grassfarmer]

Ah, the fun and games of the oilpatch - sure glad I moved away from it. Fracking every quarter with the pad on your neighbours property right at your fenceline. No compensation, no say in what happens and enough neighbours whose hands are tied because they work in the patch so won't deny access. It's a shitty scene.

[Guest]

I started typing a response, but lost interest and deleted it because I couldn’t be bothered to finish it and educate you. You have no idea what you are talking about. Pretty funny actually.

agreed , thank god we are far enough from that shit
but spent a lot of years out there , always felt sorry for the farmers
one at lloyd was especially bad . one 1/4 had about 30-40 well heads on it
didn't think it was possible ?
the oil co treated the farmer like an intruder
when we left that project , I told the oil. co. that no one would pump fuel tanks out for a long move (East coast )
felt good giving that farmer 5000 gals diesel for free

[iceman]

agreed , thank god we are far enough from that shit
but spent a lot of years out there , always felt sorry for the farmers
one at lloyd was especially bad . one 1/4 had about 30-40 well heads on it
didn't think it was possible ?
the oil co treated the farmer like an intruder
when we left that project , I told he oil. co. that no one would pump fuel tanks out for a long move (East coast )
felt good giving that farmer 5000 gals diesel for free

You are a good man. He will never forget you

[checking]

I am not against oil companies developing their minerals.

I am against the government giving away surface opportunities with sterilization legislation in the guise of safety. There is in this area a place for both, but it takes some communication and some negotiations for parties to settle on spots where limited buffer zones need to be applied on undeveloped land. If the government can tell pipeline companies, which is a closed system development, that there is no excuse for a system failure, it can bloody well tell an oil company there is no excuse for a satellite test facility failure. If they can't be failure free, then remove those things until they can, force them to mobile test with an operator on site that can shut it in if it vents, or run whatever multiple lines they need to do the government mandated tests at their super batteries that already have a 500 meter buffer. I can live with a single super battery buffer, and a 125 meter well buffer, but these test station facility buffers are horseshit.

It is not fair to wake up one morning, and discover, on your own, that you just lost a huge chunk of your quarter section, or quarter sections to multiple pads on neighboring lands. It is an outright theft of use, without consultation, and without compensation. It is multiple times worse in area to that of unpaid for buffers on either side of international pipelines.

[GDR]

This is why oil leases and farming land don't mix, and why the first detracts in this area from land value.

A quarter with four to five single surface leases comes on the market. The cumulative annual lease payments are $15,000/year. As a potential buyer of this land you will have to pony up five to six times the annual lease payments, around $90,000.00, plus what you consider a diminished quarter is worth to you as you will be farming little of a typical 3.5 acre surface lease which includes the lease road (subtract 10-12 acres on a good year).

Granted in eight to nine years, your principal outlay will be returned to you, less if you don't value its investment worth, and if you feel lucky. The lease could become orphaned before payback, or god forbid the oil company abandons the down hole, reclaims the surface, and your annual rent goes to zero, before pay back.

Factor in that these earlier taken leases were often chosen for their high ground position that could leave you with a lot of cut offs due to knob and kettle topography you may have purchased. There is also that dreaded weather that easily tops those stupid berms that oil companies have to construct around each lease. Now, they don't berm the whole surface lease, just enough to accommodate a service rig. The rest of the equipment is usually parked on their lease that you had the choice to farm, but not necessarily the right to harvest. You have already been lease paid. Those berms antagonize the lease mower, and often breach to flood out twice the crop as the size of the lease. Please, someone fill in the missing pieces. There are many, even some on the flip side that must exist in big wheel country.

Mostly ok oilfield experience here, still would prefer no exposure but surface leases have been decent money over the years.

Issues I've had definitely drainage issues, you cant build a clay pad and not expect to have runoff flood out on water exit but not their problem. Had a operator try to light their incinerator with a flare gun, fires 2 shots both started fires in my stubble, lucky i was already on the quarter with a cultivator. Biggest issue as mentioned is it just removes the possibility of other land uses on that area and surrounding.

I got a very pleasent letter about a gas well recently explaining that gas prices are low so would Mr farmer please let them reduce their surface lease payment by half until prices recover. (Trident energy) I sent them a note back saying due to lack of rainfall all summer and a delayed and difficult harvest and depressed grain prices would they consider paying double! Not holding my breath.

Does sound like our surface lease payments are higher here in central ab. 3800 to 4500 per single well, even have a half mile pipeline that pays 9500. All helps but does limit possibility.