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« Talking to himself | Main | TDBS throws hat in different ring »

Jul 25, 2011

Comments

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David Boyd

Perhaps we can encourage North Carolina landowners to help in that process by reading and understanding that to which they are agreeing.

Ed Cone

Absolutely, but as you can see from the article there have been some sharp practices by the drillers and their lawyers, so just saying to the average Joe, "read and understand, or suck on the consequences," may not quite cover the need.

David Boyd

Someone following a contract to the letter in order to benefit themselves? Shocking!

Ed Cone

No, not at all shocking. Quite usual.

Which is why regular North Carolinians who don't have teams of lawyers at their disposal and bags of nasty tricks of up their sleeves need some protection.

Hugh

Why provide legislation to protect just land leases? Idiots sign bad business contracts every day. There's possibly more money lost on mobile phone contracts that benefit the service providers each year than will be lost in a year on land leases.

James

I don't care about land owners who do stupid things for money. Let them eat dirt.

What I want is bulletproof liability for frackers in the even that public water (i.e., ANY water) is contaminated by their operations. This is not about individuals and their property. This is about the privatization of profits with the public (you and me) taking all the risk.

I'm thinking that a $10 million escrow fund per well might do the trick. Plus jail time for the greeders who own the companies.

Ed Cone

Hugh, the answer might or not involve legislation.

But writing people off as "idiots" because they lack the money and education to square off with corporate sharks seems like bad policy, and not very neighborly, either.

Fred Gregory

Legislation to protect lottery winners ? How about trust fund slackers ?

Ed Cone

Lottery winners:

"...the northern Pennsylvania couple's suddenly valuable 117-acre parcel netted them $234 per year...The Beinlichs are among thousands of residents living atop the gas-rich Marcellus Shale who signed lowball leases in the years leading up to the boom...

...energy companies are drilling not to produce natural gas, at least not right away, but to extend their cheap leases indefinitely...

I'd hate to see North Carolinians taken advantage of by predatory outside interests.

Billy Jones

I find it simply amazing that some conservatives and supposed Christians commenting in this thread somehow think it's okay to use the law to take advantage of the working class. Especially being that some of them are retired law enforcement officers and military who swore an oath to protect and serve the citizens of the United States of America.

I guess it shows you where they, Christianity and the law really stand: nowhere.

Billy Jones

To everyone here and especially to those who my last comment was aimed: My comments were unfair and over the top. I was wrong and you have my apology. Unfortunately I am unable to take back what I have already done.

And no, my apology does not make it okay. It was beneath me.

RBM

I'd hate to see North Carolinians taken advantage of by predatory outside interests.

Following is an example of a Chesapeake practice, readers and land owners, should be aware of and concerned with. It's from The Oil Drum by ROCKMAN and it's a technically oriented detail:

FOR ALL For those not as anal as WT and me let me simplify the point about Chesapeake's "projections". When any of these fractured shale wells are initially tested it's impossible to project it productive life. So they'll use "curve fitting" which is a very prejudiced way of making an estimate because you have so little curve to work with after just a few weeks of production. These wells don't decline in a linear manner...not initially. So curve fitting is as best a very rough estimate and easily fudged. OTOH Mother Earth is very kind to us reservoir engineers. After 2+ years of production curve become very predictable on a log/normal plot. You don't need to very smart to lay a straight edge along the curve and see at what cumulative volume the well reaches abandonment pressure. This is by far the most accurate measure in the oil patch.

So what companies like CHK do is take a very "liberal" use of curve fitting, make a rather optimistic projection and then, after a few years of production come back and release public statements regarding how inaccurate their original estimate was. Hmmm...you didn't see their press release highlighting how badly they misestimated recovery from the DFW leases? That's because they didn't issue such a press release. Securities laws don't require it. But it would obviously show up on the bottom line of their reserve report, right? Which is why it's absolutely critical that such operations keep drilling new wells. New production comes on at much higher rates then the aging wells. When blended together it tends to hide the decline rates of the older wells.

But the some smart *ss like WT gets the actual production history from some other un-named smart *ss and ...TA DA! The truth will set you free! Being a tad serious for the moment this is what frustrates the heck out of folks like me, WT, Rocky, etc. The cornucopians bombard us with press release from public companies that "project" great things in the future but no one, especially the MSM, follows up on those projections.

The post that this is excerpted from has a second 'case history', so to speak, for those interested. I hope that Preston Earle is interested. given his dismissal of a similar previous posting of TOD commentary, by me.

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