Northern Michigan Natural Gas Discovery

[Woulde]

There are several articles about the recent Michigan natural gas discovery on the web.  Google the above subject and you can read all day.

Natural gas wells in Northern Michigan are not unusual, they have been around for many years.  But this latest find is apparently 50 times the normal volume....about 2.5 million cubic feet per day compared to the 50,000 cubic feet volume of older wells.

Apparently, gas fever has hit the area.  Land owners are selling mineral and surface rights to oil companies.  Some are getting top dollar.  Up to $5,000 an acre as a signing bonus and 3/16 royalties.  The State of Michigan has leased several hundred thousand acres for millions of dollars.

That may be good for the economy, but for people who enjoy the natural beauty of Northern Michigan, I'm not so sure.

Last year I purchased 23 acres in Charlevoix county with the intent of building a peaceful vacation home.  Now, I find out about the "gas rush".....and mineral rights.  Apparently, I do not own the mineral rights, and those who do, may use the surface to extract them.  That's how I understand it.

Frightening thoughts about building a timber frame only to have a "rig" drilling for gas on my property.  I was just about to hire a local excavator to cut in an access road to the top of the hill, but now, I don't know that I should.

I suppose I need to hire an oil and gas attorney to investigate who owns the mineral rights and what my options are.  I know nothing about the subject.

My question to the foresters, and Ron Scott in particular is: since this land is on a heavily wooded Ridgeline overlooking Lake Charlevoix with steep slopes and nary a flat section on the property, would the State allow drilling on this sight?  Can the State prevent drilling on a sight it feels is improper to do so? Another factor to consider is the that the Boyne City fresh water reservoir is on land adjacent to my property.   

I mentioned Ron Scott's name because I hired him to give me a maintenance prescription and we walked the land together a few months back.  Great guy, by the way!

Looking for opinions on where to turn to get answers regarding the potential of unwanted drilling rigs on my property.

Thanks.

 

[Texas Ranger]

You may or may not be drilled on, but you will be in a pool of some nature, and there is little you can do to sway the powers that control the pool.  This is based on what I know in Texas, your millage may vary.  Normally, a well site will be several acres, with all sorts of environmental requirements that the drillers may or may not pay attention to, depending on your state regulations, along with the well site, there are the connective pipelines to move the product. 

Good side, drillers like flat areas.

[Ron Scott]

Woulde,

Yes, there appears to be an oil and gas mineral (OGM) leasing rush here in Michigan due to the recent State mineral lease sales in nearby Missaukee County. A lot of offers are now being made for the private property OGM leases.

Michigan has very good regulations on controlling OGM operations. It is doubtful if any OGM operations would take place on your property due to it's steep terrain and difficult access and its sensitive location. If there were valuable OGM to go after on your property, it would probably need to be done with a slant drilling operation set up off site of your property, if done at all.

You are in a sensitive area of Boyne City and Lake Charlevoix with their community water system etc. so I'm sure that anything happening on your property or nearby would be well regulated if allowed at all. Local ordinances may also apply.

Yes, it is best to seek out an attorney well versed in OGM leasing and surface occupancys though just in case you are contacted by the owner's of the mineral rights under your property.   

Thanks for the kind words concerning my visit to your property.

[Corley5]

Been good for the economy here so far   

[pasbuild]

Did you or your folks get in on it Greg?

[mrcaptainbob]

One oil and one gas well were closed up two years on my property in Jackson County. It was unsightly, but the looks were slightly offset by a modest income. Now, both are gone. The land now produces forage for the deer, turkeys and rabbits.

[Corley5]

The whole neighborhood signed leases    Most of the gascos have pulled out and aren't leasing now.  The ones that still are have cut their offers in half.  It's a wait and see now.  Wait to see what a couple mineral test wells show, what a some new producing wells show and the results of Oct. state lease auction.  The gascos have spent a bunch of money around N Mich and I'd be really surprised if these leases expire in 5 years without anything happening.

[Ron Scott]

The MSU Extension Service has been putting on training sessions in different northern Michigan community areas where leasing is active so as to inform and educate landowners on what to expect and how to negotiate appropiate mitigation measures before entering their property into OGM leases.

You may want to attend one of these sessions if you can. Such a meeting is being held in Reed City, MI tonight. You might check with the MSU EXtension for a schedule of such meetings.

[SPIKER]

The other thing is you can build where ever you like if it is the only flat place on your property then they cant put up a gas rig there   Like someone said most gas leases go un-used.   

Mark

[Corley5]

The proposed drilling units for this play are govt land survey, 640 acre square mile sections.  Mineral rights owners are to be paid according to the percentage of the section they own.  If drilling does occur in the section your property is in you may have a hole drilled horizontally a couple miles under your land.  There is probably a better suited site than yours for the actual well pad.

[Woulde]

Ron: Thanks for the heads up on the MSU education.  I would love to attend one, but I'm not going to be able to get away for a while. I certainly won't sign anything without a thorough review.  Not that I've been approached about signing.  I found out about this from the Realtor that sold me the land. I don't think he's involved in leases.

I think I'll move forward with the access drive.  I cannot image anyone could use a private road I paid for to drill for gas on my property. After all, this is America.  I'll make my last stand on that hill if I have to   I'll signal others if I see them coming; one if by land, two if by sea....

Glad to hear others are up there are making a few dollars up there leasing there land.

[Corley5]

Just learned that ENCANA has filed a permit to drill a well on state ground 3.5 miles north of us.  Hope it's a super producer when finished 

[submarinesailor]

Aquick look around on the web and I think ENCANA is the largest producer in North America.

Bruce

[Restoman]

the Hanesville Shale had everyone nuts down here starting about 2 years ago.  My .3 acre lot even has promise for a signing bonus and nice royalties.