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Ohio Utica Shale

Halcon Resources does not address Ohio lease renegotiations

By Bob Downing Published: November 30, 2012

From the Marcellus Drilling News:

A few weeks ago MDN told you about a new landowners group in Lordstown, Ohio, formed in response to requests from Halcon Resources who is asking landowners in the area to sign modifications to existing 20-50 year-old leases on their property to allow for Utica Shale drilling (see this MDN story). At the time the new Lordstown Regional Landowners Group represented 5,000 of the 31,000 acres in Trumbull and Mahoning counties (Ohio) Halcon had recently purchased the rights to.

Apparently the movement has picked up steam and Halcon issued a press statement yesterday saying they want to cooperate with landowners to make them money on royalties, but stopped short of saying they would renegotiate leases, which is the aim of the landowners group.

 

The Houston-based energy company that took over mineral rights leases for about 31,000 acres in Trumbull and Mahoning counties has vowed to extend a “cooperative effort” to landowners interested in renegotiating their leases.

The company released the statement Thursday in response to the newly formed Lordstown Regional Landowners Group, which has been vocal in its attempts to renegotiate Utica Shale mineral rights leases on more than 30,000 acres Halcon purchased from NCL Appalachian Partners for $194 million.

Halcon, however, stopped short of promising to strike new deals.

”Halcon intends to spend hundreds of millions of dollars and use its considerable technical expertise to create significant profit for itself and the landowners, who own the royalty interest,” the company said in a prepared statement.

A company spokesman said changes to the leases will be necessary to allow for drilling of horizontal wells with enough lateral length to make them economic, and without these changes, the wells will never be drilled and profits to all will be lost.

”Halcon will reach out to each individual landowner in an attempt to establish terms that are mutually beneficial and result in the best chance for successful wells,” the release said. ”Landowners can be assured that a cooperative effort will result in our commitment of time, expertise and millions of dollars of capital in an effort to develop the most profitable oil and gas wells possible.”*

Although the landowners are interested in a good deal for royalties to be sure, they’re also interested in writing in protections into revised leases. Landowners want the drilling, but they also want updated leases in line with those signed over the past few years.

The Halcon rep’s statement which said, essentially, “If you don’t sign the agreement we’re circulating right now those wells won’t be drilled and you won’t make a dime,” is a bit terse and doesn’t, in MDN’s opinion, set the right tone if you want to reassure landowners that you’ll work with them in a “cooperative effort.” It also sounds from the press statement like they don’t want to deal with the landowners group but rather want to deal one-on-one with individual landowners. Again, not a smart move on Halcon’s part.

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Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.