CBM reducing land values

[cowman]

Well not sure how I was lying and spinning and deflecting, just thought I was trying to understand why this application was denied?
The main point of the well adversely affecting the proposed subdivision might be valid? If a hog barn was across the fence, denial would be equally valid?
It actually seems to me this subdivision should have been invalid right from the start? First parcel out isn't a problem..."subdivision" for a short term compassionate reason is a problem?
I'm not sure if the number of 9 wells per quarter is correct or not? The landman tells me they don't think they are going to need more than 2 per quarter...is he a liar?
I guess 27-35 is a pilot project to see if multiple wells are economically feasible...isn't that what they are saying? The EUB has appointed a group of landowners to sit on a committee to consult on this project? There are some good solid farmers on that committee, whose families have farmed there for a long time...are they all lackeys of the EUB and industry?
I don't see any CBM company forcing anyone into accepting wells? What I do see is a the majority of farmers willingly signing leases...and darned glad to get the money! Now maybe they are all short sighted or something, but that is their right...they do own the land!

[farmers_son]

Cowman: Well, actually you are technically forced to accept the wells. Everyone knows when the landman comes knocking on your door that if you don’t deal the company will take you land by force anyway so you got to deal.

You said yourself in other posts that the Alberta government is going to see those wells drilled. When farmers sit on EUB committees they realize that all that can be accomplished is to make the best of a bad situation. The outcomes of these committees is a foregone conclusion.

When farmers sign leases, it can mean a lot of things. It can mean they are desperate for the money or it can mean they have no choice but to sign anyway. It is a concern to me to see the oil/gas/CBM companies grow richer while other sectors of the Alberta economy like agriculture are withering on the vine. If farmers are so hard up for money that they have to grab at whatever money the energy companies offer it should never be taken as an indication that the compensation is fair or that the farmer was in any position to consider the long term consequences when they are facing immediate financial distress.

[cowman]

farmers son: Actually the farmer doesn't have to take the well? Offset drilling is not a big problem these days? It really isn't.
Are the farmers "forced" to take the well, because they are broke?
Tell me, how hard is this to figure out? 64 wells per section...16 wells per quarter? Average price per well $2000-$3000...or $32,000 to $48,000 per year in annual rent/quarter! I know barley is a little higher lately...but she sure needs to climb a lot more if this is the case! Never mind the 16 X $13,000 initial payment!
Cowdog mentioned how in 25 years the whole ten miles on either side of Highway II would be worth millions? I would suggest, a bird in the hand is worth more than two in the bush?
This isn't rocket science? When the landman comes knocking with real money, don't be fooled by thinking somehow you are going to get richer by growing grain or cows? No body wants them. Just my opinion.

[cowdog]

A quick straw pole - have you ever been lied to by a landman - yes or no
1 for yes here

As for the forcing of well and pipelines onto the landowner. It happens all the time to the point where currently the Surface Rights Board is plugged. Last I heard it was a month and a half wait for a right to entry order and nearly 2 years for Board Hearing; and that is why companies are giving up or angle drilling. By the way
in many areas the targets are so shallow
that angle or directional drilling is impossible or so expensive and risky to complete that is not a realistic solution. A more sensible solution for now is to go to the suckers who are
willing to take $2000 to $3000 annual rents instead of the $5000 to $6000 that most are now getting.
Now lets look at the long term consequences: say you live on a 1/4 at the start of a dead end road that accesses yours and 7 other 1/4's with 2
wells each [16 wells} and as is the case most times 2 companies and all wells are producing. You will likely experience atleast 24 refracture jobs a year[average of 8 large trucks 3 small], 4 service rigs a year[ about 100 truck trips in or out each], 384 well swabs per year [ 3 large trucks each], 104 operator checks routine, 26 operator checks non-routine, 64 equipment maintenance trips, 64 equipment repair trips, 48 water truck trips to remove water of condensation, and atleast 52 engieer or supervisor trips in and out. Thats an additional 2174 trucks passing your residence twice each a year, day and night on just that one dead end road; and oh yah dead end roads are where companies like to place compressors. Sweet dreams cowman.

[wbrower]

Dead end roads also make excellent cover for cattle thieves. But according to the crown in Alberta cattle are not stolen intentionally, sometimes they just get mixed up.

[cakadu]

If as cowdog says that the land values along the QEII corridor are headed into the stratosphere, why wouldn't I want to keep my land in a manner that would allow me to take advantage of those prices, if that is what I wanted to do? Why would I take $32 K or even $48 K per year when I could potentially get $5 or even $10 K per acre?

It also seems to me that once the company is on, they are on there and if there is a change in the rules, you are pretty much hooped if they want to change things, aren't you? If you lease it to them, then aren't they able to do what they want there? Even if they have to come back with some other terms and another offer, they are there.

For the sake of a few dollars now, many are severely limiting if not eradicating any choices they might have in the future. Based on cowdog's case, even your neighbors can limit you as well. The landperson and the oil/gas company are not here to make it good for the landowner - they are out for one thing and one thing only. The cheaper they can get it, the better off they are.

And we haven't even touched on the environmental effects and consequences of all this drilling. Nothing is done in isolation. We really do need to start looking at the big picture.

[cowman]

cowdog: Yes I have been lied to by a landman...in fact several! And I've been lied to by car salesmen, livestock dealers, customers, machinery dealers! I've also met some very good landmen who would go the extra mile for you. As in any business...they aren't all evil!
Now I don't live on any dead end road, but of course there is a lot more traffic...there always is when commerce takes place? I also live close to a large subdivsion...and that has increased the traffic considerably? That is just one of the costs of progress.
If $2000-$3000 is below par and someone is getting $5000, then at the 5 year review...you too will be getting $5000! If you read any of the cases where someone goes to the surface rights board over amount of compensation...the board rules almost exclusively on parity with surrounding leases?
Lately I've been hearing stories of adverse affect going from around $1800 to $3500? Apparently the surface rights board did grant that to some landowner? The way I heard it was this:
Conoco-Phillips vs landowner. Conoco-Phillips was having a major meltdown at their head office and no one showed up for the hearing...so surface rights board granted the increase? Since then Conoco-Phillips has got its act together and is appealing the decision?
Do you know if this is correct?
How do you think that will turn out?
Despite the perception I am the "oil companys boy" on this site, I assure you I am interested in orderly, well thought out developement of this resource and believe the landowner deserves a better deal than he has been getting? And every little bit of information I can get makes me a better negotiator.
I belong to a surface rights group and the free holders group. The municipality I live in was going to have a synergy group and I was going to be on that, but politics basically scrapped that! The surface rights group didn't see any value in landowners, municipal people, the EUB, and the oil/gas companies sitting down and trying to come up with solutions where everybody was a winner? They seem to enjoy confrontation...and I find that a disappointing solution. Just my opinion.

[cowman]

One more thing: CBM is a different ballgame than conventional wells? The coiled tubing rigs have no trouble going sideways at shallow depths? Now without a doubt it costs more!
And cowdog you are very correct when you say the CBM companies pick off the easy targets first. A Quicksilver supervisor told me that very thing. His exact words as near as I remember them "We come into an area and deal with the guys who want the wells. Later we come back and put some pressure on and get a few more. After that we start to play hardball!" So far they haven't had to play hardball!

I had an interesting conversation with a farmer west of Bowden? He told me the company operating there(don't remember the name- conventional shallow gas) gives you the offer and if you don't accept they go right to the EUB for a right of entry! Sure glad Quicksilver doesn't deal that way!
The young man who is Quicksilvers landman, is a local machinery dealer/farmers son. I think he deals fairly honestly. If he can't do something he'll tell you! If he can bend the rules a bit, he'll do that too!

[cowdog]

cowman - The case before the SRB that raised the advese effect payment from $1200 - 1800 to $3000 -3600 was actually 2 decisions involving 2 companies verse the Lemay Bros Near Three Hills> One company was EOG the other Conoco-Phillips; niether company brought forward any evident to support their claims, the Lemays used data from their own GPS controlled precision farming on board computors to prove their case. If the appellet court does not buy the company's arguement that it has always been this way then the evidence will stand, score 1 for the Lemays. The companies can still appeal at a higher level however, and if they are granted a further appeal may bleed the Lemays out.
As for your coil drilling horizontally through the HSC coals that is nonsense.
HSC is not 1 coal seam it is as many as 36 many are less than 1 meter thick, some of the gas being produce is from the interdispered sandstone and some are wet. Completions would be a nightmare and are not justified by the gas in place. But as I said you can slant drill at an increased cost.
As for Spinergy Groups you can keep them
they are a major time waste that accomplished nothing. They are however an excellent recruter for Surface Rights groups. Let me ask you a question; when energy companies make their decisions in their boardrooms are the landowners and the municalities invited to help them? So landowner groups should let the companies help them with theirs?
As for your assertation that SRGs are confrontational that is nonsense also.
They are made up of a diverse group of landowners ranging from ones like yourself who say show me the money to those who want no more energy encumberances on their land.
The confrontation results from the Culture of Denial created by the EUB, AENV, The oil and gas friendly Farmers Advocate, the Energy department, industry,etc. In your Red Deer county there has been many ground water incidents related to industry activity some pre baseline testing some post. I understand that one of the SRG is gathering these to post on the web.
I suggest as an example you ask your friend at Quicksilver to tell you about the spring they destroyed just NE of Windboure and {to their credit} the action they have taken to fix the problem [ after the landowners commenced legal action].
Here's another exercise for you, ask the operator of the wells on your place for the MSDS sheets for all WHMIS controlled substances used in those wells for both drilling and completion, let me know how that turns out. I'm betting they say no problem but you will never see them without a court order. You need to learn a lot more about the risks of cbm; ask why if it was not causing migration into the non-saline aquifer fracting above 200m has been banned unless the company provides
a detailed engineering study to the EUB first [by the way since the practise was banned no company has commissioned one] or why is there now a shallow fracing steering committee looking at the problem. You think maybe the incidents of gas migration were getting out of hand?

[farmers_son]

Cowman: I have been lied to by landmen too. And like you probably have been led down the garden path by people I do business with.

The difference, and this is very important, is that when other people I do business with are not reputable I can choose to do business with someone else. We are forced to deal with the company landmen. We do not get to choose which energy company we have on our property. The energy company has the right to take our property by force for their own greedy profit motives. So it is a big problem when these people lie, mislead, cheat, harass, pressure the landowners. And if the landowner is under financial pressure, and far too many are, then the landowner is even more likely to fall victim to the landmen's tactics.

I am pretty certain I have dealt with more landmen than you, on my behalf as well as on others behalf and I have never met a energy company landman who would not cheat you. If you think you were dealing with an honest one then he/she successfully pulled the wool over your eyes. Some are pretty smooth but they are not there to do you any favours.

I would put it to you that if the company can directional drill they why do they need the right of expropriation? Why do they need to right to take your land by force if they can go to the neighbours land so easily. I think technology has advanced to the point where the Surface Rights Act could be abolished as the company can access their minerals without expropriation.