Need advice on TN property

[DebbieLynn]

DH and I have 20 acres Scott Cty TN, oil/gas co wanted to lease for poss oil/gas drilling, I said NO due to fact I plan on moving up there and I don't think the way they drill is good for anybodys water. I don't know how to find out if they have bought/leased rights to drill close by on surrounding properties and if so I don't want to move up there in the future and find out the water is no good. Anyone have any ideas on how I can get this information? I've only asked one close neighbor and he says they haven't asked his family, (his in-laws live next door to him).

[Two Cents Worth]

Leases are recorded at the courthouse. You could check with them to see if others have leased their property. Generally a company won't drill unless they have quite a bit of adjoining property.

Property is often leased for years simply to prevent another company from getting the chance to lease it, hence no drilling may ever occur, or it may occur once a sizable block has rights secured on it.

If you do give a lease and the land is drilled upon and there is production you may find that you will have enough income to pretty well pick your choice of other property if you don't wish to co-exist with the production on site.

Roll of the dice and it is certainly your choice whether to gamble or not.

[Darren]

What happens depends on how deep the driller will be drilling. If it's a shallow well, 4000' or so, you won't be bothered. A deeper well with horizontally drilling can suck the gas out from under your property and you will never know it. If the company is trying to put a large block together you might get left behind. Folks next to you will get the lease and royalty money. You won't.

Given the rock bottom price of gas, the economics of drilling are interesting right now.

[DebbieLynn]

Thank you, I'll give the courthouse a try! I don't know why but they ( the company) called us and then sent a contract "next day air" for us to sign, that was 2 yrs ago and the closer I get to moving up there the more this is bothering me! The lawyer we had go over the contract also stated to us that we could potentially have the income to "live elsewhere" and that's all well and good but what about the water? We all seem to forget that we cannot live without water no matter how much money we might have at our disposal. Curious if anyone else has had any experience with leasing their mineral rights and how they feel about it now?

[luvrulz]

Here in Ky, the driller keeps 88% and the land owner gets 12%. And they tear up the land.... There've been cases of where the oil drillers sneak onto the property by a back entrance or old road and do the investigative drilling... They called us but we turned them down... The smell, the mess - just wasn't worth it.

[Darren]

Since it's been two years since they've contacted you, wouldn't be too concerned. A check at the courthouse can tell you if there's a lot of activity. In some cases, the up front payment, $2,000+ per acre, can be considerable. Marcellus drilling is hot now in WV, PA and NY.

[ronbre]

all the leases in our area of Michigan fell through when their wells came up empty

[anniew]

I'm in the Marcellus shale area. Everyone around me had signed and I was contacted for the 3rd time last summer. I signed at the going price at the time which was over $5,000an acre for even small parcels (an acre or less). I have a lease that does not allow them to come on my property, so a well could be next door and they could do a horizontal under me, but then I'd be in the "unit" or "pool" to get a proportion of the royalties. Here the latest leases give 21 percent royalties BEFORE expenses, and are good for five years. If they don't start drilling in five years, they have to either give up the lease or pay the upfront money again.

Yes, leases are recorded in the court house, so you could check on neighboring properties deeds to find out who has signed.

I didn't want to sign, but when I contacted a lawyer, he said things might give you bad water...if you sign and they drill, at least you have money to go someplace else. If you don't sign, you have bad water and no money.

Make sure you have an attorney who is knowledgeable in gas leases before you sign anything. There is just too much that lay people don't know about so a gas attorney is a MUST.

I don't expect my area to be drilled for another two years at least. In the meantime, I can be looking for alternate locations to buy if things go bad. I'm not too far from the infamous Dimock area where many water wells are allegedly contaminated.

[DebbieLynn]

Thank you for the information. I'm going to try the courthouse as mentioned. I'm not concerned about drilling on my property cause I already said no. I'm concerned about the harm they do to the water supply which would affect me if they drill in surrounding properties. We only have 20 acres, there are much larger tracts surrounding us, which I find interesting as to why they would even consider such a small parcel as ours, unless they think they could get to the stuff quicker/easier from our parcel. All sorts of possibilities and I love a good mystery!

[WJSpires]

I've done a lot work as an Environmental Consultant with Natural gas drilling, most recently in PA with the Marcellus Shell. The drilling regulations are getting stricter in most states, including TN (I live in middle TN). That being said, there is still a risk of ground water contamination depending on how deep the well is sunk and how deep your well is. The drilling in TN is not using the Fracturing process like the Marcellus shell in PA and WV. They are also not going as deep. If your well is in a shallow aquifer and the well is drilled deeper then there is less chance of groundwater contamination in your well.

As to why the company wants to use you 20 acres instead of the larger tracts of lands around you, there are several factors that go into well placement. All of the well locations need good access, e.i. close to a road capable of supporting the trucks being in the drill rig and equipment and so the gravel access road they will install is not too steep. Also, every well has to be permitted for any wetland, stream or archeological impacts (this is what I do) and it is easier to avoid these than try to permit for them. Even crossing a small stream with an access road requires permitting. Your property my be the best location logistically in the area considering all of the above. If you have any questions sent me a message and I'll give you any information I have.

One thing a cannot stress enough is to get a GOOD lawyer who is experienced in this. Do not sign anything until your lawyer has looked it over. If you do allow drilling on your property you can specify in the contract when and where they are allowed to access you property, make sure that they are only allowed at the well location and the access road and the rest of your property is off-limits. Also make sure that included in the contract is that the gas company pays actual damages for anything they destroy. Get your well water tested for VOCs, SVOC,and Metal before the drilling begins. It may cost a couple hundred dollars but if something happens to your well you now have proof and can work with your lawyer to get damages. If you take such a sample, hire a third party to do it, that way the gas company cannot accuse you of spiking the sample.

[DebbieLynn]

Thank you all for the valuable information! I just didn't like the whole thing from the beginning and they haven't asked again. My main concern is the water supply if they are drilling around my property. Wouldn't make much sense to move up there if it's going to be contaminated by drilling. I'm probably being paranoid but I've watched the water supply here go downhill in the past 20 yrs. I'm actually from TN and want to come home eventually! I wish I knew more about the drilling process and what all is involved just as an FYI. The company that wanted to lease the rights is currently being sold to Chevron.

[Alice In TX/MO]

http://science.howstuffworks.com/env...-drilling5.htm

[DebbieLynn]

Well this has been an eye opener! Thanks for the replies and I think I may have learned a thing or two along the way and that can never be a bad thing.

[Darren]

"The company that wanted to lease the rights is currently being sold to Chevron." That seems to be the latest takeover strategy by large energy companies that were previously in the oil or coal business. Many of them are buying established companies that are primarily natural gas producers.