CBM reducing land values

[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.

[cowdog]

By out of hand I mean that the Culture of Denial Spin-doctor could no longer hide them. There is a lot of problems and an answer question that go along with this CBM, I'll post a few more later, I got lots. By the way anyone heard of Ulta-shallow Gas, I understand that the EUB is currently biulding a data base on its potential here in Alberta?

[cowman]

Well again, thank you for the information, very interesting!
Maybe I am naive but I like to think people are not liars...until they prove otherwise!...even landmen!
I have not negotiated any agreement for several years without my lawyer. Without a doubt he has made me a lot of money...whether I paid him or the oil company!
I personally don't get all bent out of shape over gas migration. We have had gas in our water long before any drilling ever took place around here.
I have heard people who claim CBM has destroyed springs...and I do believe them. I recently had a CBM well drilled less than 100 meters from my springs? I was quite concerned but the company sent out a guy who showed me what they were doing, tested everything, and in the end I was satisfied there was no way this well was going to be a problem. I guess we all have to decide just what we can live with?
This province was not built on confrontation? We need to find a way to co-operate to develop this resource? Unless you own the mineral rights, you do not have a right to keep the owner from exploiting his property.
I am not saying the government or companies should be allowed to trample all over the farmers rights? I do not think we are getting a fair deal or are dealing on a level playing field?
Hopefully Mr. Stelmach will start to change that?
I am not against Surface Rights groups! I belong to one. Some of the members are a "little bit out there" but most are just farmers trying to get a better deal and protection for their farmland? I can understand that some people don't want any activity on their land and I guess they need to talk to the government about that! Most farmers welcome the oil company and their money!
I do believe the Surface Rights groups do a good job of educating the landowner and the people who step up and take an active leadership role are doing all landowners a great service! They spend a lot of time and effort without a lot of acknowledgement? My hat is off to them!

[GreenValley]

farmers_son: 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.

Due to fact the company has the directional drilling technology, the company could no longer making excuse for themselves. Here example what happen. When Petro Canada call us ask to permit surveyor to enter our land. The surveyor setup stake the wellsite ,it is close to river and is sitting on farm land cultivate fence in between them. Later days later company call back, told them NO and want to move to other place other than that site, adverse disturb is way too high and company say NO either. Again call back want to move other place and company say firm NO. So feel been no idea of what next of what to do. So I ask my Petro Canada worker friend, he suggest me go see EUB, so this is my last chance to see them. I went into EUB office and told them about whole thing, he said that company can use directional technology and can move just about anywhere. So he ask me to arrange meeting with me and landman at same time to give them full surprised. So I gave him landman time of appointment to meet us. In the morning EUB agent guy came in about 1/2 earlier hour before landman walking into my house. We talked to EUB agent about this, and waiting for landman to coming in. The landman finally came enter house and to his full surprised that EUB agent is there with us. Before he talking, EUB explaining to landman that we discussed on phone told them NO and want to moved to other location, and told them to must move to other location as offer them to move 3 different locations. After brief explaining to landman, EUB quickly leave. Then landman continue their proposed the contract and will ask boss about move to different location. In next day a call from Petro Canada say will do accept move to on 3 different locations. They send construction consultant to search the right location and call company back for proposed location, and they accept the different location than the company offer in first place. I really never forget that 2 mens in my house. Pretty scary at first but feel free at last. Reason is EUB agree that adverse affect is too low for adverse disturb is too high so offer other option is move to other location as long they has technology directional drilling. I hope that refer to CBM in future as well but with new CBM don't idea they will but give try. I feel kind EUB is my best friend but it didn't always.

[cowman]

What many people don't see is that there are some very good people working at the EUB and yes they can help you!
Now without a doubt the main goal is "get that well drilled" but they will try to make it work for everyone?
Many landowners are not against developing the resource...as long as it is done in a responsible manner? In fact I would guess the majority of landowners support developement?
The problem is there are some landowners who don't want any activity, no matter what, on their land? And that is okay if the owner of the sub surface rights can accomodate them? But at the end of the day the law does say the oil rights owner does have a right to access his property?
We live in a democracy. If the law offends anyone they have a right to try to get it changed? All you have to do is convince a majority of your fellow citizens that your idea is the right one?
Now personally I believe we need some changes how surface rights are dealt with? I believe the landowner needs to be better compensated and better protected? Ted Morton was the only leadership candidate who stated he would work to change that law...and that was a big part of why I voted for him! Obviously the majority didn't think so! So there it is...we have the status quo?

[coppertop]

cowman, the Surface Rights Board is under Morton's Ministry so it is going to be interesting to see if he follows through on campaign promises.

[cakadu]

Cowman, the "rights" of the resource owner should have to be balanced with the "rights" of the landowner. Perhaps I wouldn't feel so strongly about it if we were actually compensated for the land value that is lost and likely not recoverable in the future.

I would hazard a guess that many landowners are in "agreement" with leasing because of the circumstances that they are in and not solely because they want to see the development. How many producers actually want to have to farm around the leases?

[cakadu]

Cowman, the "rights" of the resource owner should have to be balanced with the "rights" of the landowner. Perhaps I wouldn't feel so strongly about it if we were actually compensated for the land value that is lost and likely not recoverable in the future.

I would hazard a guess that many landowners are in "agreement" with leasing because of the circumstances that they are in and not solely because they want to see the development. How many producers actually want to have to farm around the leases?

[cowman]

Linda: I am in agreement with you! There definitely needs to be a better compensation package in place? Unfortunately we have to work with what we have in place?
Coppertop: I agree it will be interesting if Mr. Morton can make some changes? I hope he can! But being realistic...A premier has a lot more bang for the buck...than a minister?
Hopefully Ed won't forget the little people who got him there?
So far I'm fairly ambivalant about Ed? He's doing somethings right, in my opinion, despite how he's getting trashed in the media. I guess the proof will be in the pudding?

[coppertop]

I would suspect that the Land Use Policy Framework may deal with some of what is being discussed on this thread. Surface rights were certainly a topic of discussion at any consultation meetings I have attended with respect to the Land Use Framework.

There will be further public consultation this spring, so it will be important to take advantage of the opportunity to provide comment on this issue.