Updated May 17 2021 they cut 5 padlocks off gate!Ember Resources defaults on surface rights lease

[Rancid Crabtree]

Regarding wellsite reclaiming and abandonment.

Last one I had done was 4 years from notice to sign off, they pay the rent until sign off.

It will take between 2 and 4 years to get from decision to final sign off.

Obviously I'm not signing a reclaim on a well you still owe back rent on.

If they want the EUB to force the sign off it would take another year to get that hearing mean while you pay the rent.

Also your going to pay 100,000 plus to reclaim to save 3500 in annual rent ?

I just want to point out the reclaiming is a total hollow threat, they may do it but that has nothing to do with your rentals.

Drag them to a board hearing you have absolutely nothing to lose.


In reality they will push as many landowners to voluntarily reduce as possible and then pay the ones who held out, and save alot of money by doing that.

[big zeke]

Well abandonment isn't the same idle threat it used to be...there are incentives for producers to abandon wells, in rare cases the full cost of the abandonment is covered (often less, maybe 50-75%) with the bulk of the cost spent very early in the process on the well and facilities and much smaller spend on the rem/rec side prior to getting the rec cert. The whole process takes years (I'd guess 4 at minimum and a lot longer if site is contaminated) and you are entitled to your full lease payments until then.

Most producers will pull whatever stunt they can to lower costs so arm-twisting to lower leasing costs is often played; find out what their CEO got paid and tell them to take it out of his salary rather than your lease payment.

Keep referring to the terms of the signed lease and don't agree to vary them without compensation. Read closely whatever they want you to sign and make sure you understand and agree entirely...don't rely on what the landman/agent says as it may be untrue.

Often producers that pick up dead wells are paid to do so, screwing a landowner just helps the economics go round.

If land leases drive a producer broke then they were on deaths doorstep anyways.

[mac1983]

Had three wells drilled, 2 1/2 miles of lease road built, and a few miles of pipeline on my land in the mid 80's by Placer Cego, on about my 5th oil co. now with CNRL. Wells have been acid fracked, worked over many times, flow tested lot's, pump jacks installed high grade road built and power lines installed. Been involved in the oil patch most of my life so I understand it and know how to work with it. I'm not greedy by nature and have never had any trouble with any of them, quite the contrary actually their people realize this and go out of their way to accommodate me, as in where do I want pipelines and roads located, extra payments for workspace on repairs, they even upped their lease payments to me with no notice years ago. They are the best neighbors I have. On a side note my crops do better on the pipeline right of ways due to the mineralized soil brought up to surface and the warmer temps from the flowing pipelines, you can see it in the crops. Not only do I get to use the infrastructure they built ie: high grade roads and powerlines, their representatives(operators) have become friends of mine and notify me when city slicker poachers (wannabe hunters) trespass on my land and play stupid. So if during hard times they need a break on the lease payments I will allow it because times are tough and when the good times return I know they return to the higher rate.

[MountainTi]

As we speak I just stopped and snapped a pic of an Ember well. Not much of a foot print. Farmed right up to the Tec fence. Looks to be about 25’x10’.
At $2000-$3000, how much is that per acre for rental?

935E005B-7DCC-45F2-935F-EB05373A73E5.jpg


No lease road. Just a 2 track that they will avoid as best as they can when in crop

[MooseRiverTrapper]

Originally Posted by Rancid Crabtree

For what it's worth I do think the MD and Counties have been raping the companies and wasting the money.

Exactly. They have been raping the oil companies for 30 years and now they can’t afford to pay it anymore.

[mac1983]

Originally Posted by MountainTi

As we speak I just stopped and snapped a pic of an Ember well. Not much of a foot print. Farmed right up to the Tec fence. Looks to be about 25’x10’.
At $2000-$3000, how much is that per acre for rental?

Attachment 172177


No lease road. Just a 2 track that they will avoid as best as they can when in crop

You could chop that lease payment by 75 % and still make more than cropping it.

[MountainTi]

Another Ember well. That one doesn’t even make 10’x20’.
So what is the lease rental on that per acre? About $15000?
As I said, I see both sides

AF7DB1F5-6C40-460E-B1A7-957293DC6F97.jpg

[MountainTi]

Originally Posted by mac1983

You could chop that lease payment by 75 % and still make more than cropping it.

Yep. My garden takes up more ground.
I’d gladly turn off the auto trac and make a quick circle around that 150 square feet for $1800

[wwbirds]

Originally Posted by MountainTi

As we speak I just stopped and snapped a pic of an Ember well. Not much of a foot print. Farmed right up to the Tec fence. Looks to be about 25’x10’.
At $2000-$3000, how much is that per acre for rental?

Attachment 172177


No lease road. Just a 2 track that they will avoid as best as they can when in crop

That certainly must be the best case scenario as stated previously if they only utilize the minimum amount of the lease. the glossy brochure they distributed back in November 2020 showed canola plants right up to and over the cow barrier pipe surrounding the well head. Not so much in real life, we can have seasonably wet weather which means that 2000 foot double track can have 2 or 3 tracks where they have avoided low spots or water, sometimes they just seem to drive around a patch of weeks. You wouldnt think 2 trucks coming in a few times a year would wear ruts 2-3 inches deep. also in winter with a 6 foot high 25 foot blade they often gouge out a new path as the old tracks are buried under snow. Of course if you remove the snow insulation from pasture land it winter kills and the gouges the plow takes out of the 40 foot wide area are like divots that never heal never mind the deposited snow banks on both sides of that ploughed road containing divots of sod and rocks take forever to disintegrate back into pasture. I think it was 2015 we had massive snow amounts so the banks raised on either side of the ploughed area were 4 feet plus high so all access to my back 80 was blocked until I paid a neighbor to use his 4 wheel drive tractor and 22 foot blade to carve me holes through the snow deposits they had left at every entrance gate.

I wont miss wondering if they closed the gates this time. I wont miss wondering if the white service truck cruising the edge of my shelterbelt no where near the lease road is looking for random pheasants or cutting the tops off spruce trees 3 weeks before Christmas. I wont have to replace pheasants already planted that my client did not have a reasonable chance of hunting because they failed to call before coming to ensure we did not have a planted hunt in progress on the day they wanted to service the well or plow the drifts.
the long and short of it as a good friend criminal lawyer of mine said it is physically impossible to suck and blow at the same time. However Ember is trying to suck the resources out of the ground, suck the investors into thinking they are a viable corporate responsible citizen while blowing off the farmers and land owners with claims they cant continue as things now stand without concessions all the while buying up new properties at discount prices.
I am sure every one of these acquisitions was backed up with a cost benefit analysis with projections based on fixed costs and variable revenue and expenses yet they continue veiled threats to leave the clean up to the provincial body if they cant reduce costs. Not good corporate citizens at all if is always someone elses fault when they screw up.

[mac1983]

Originally Posted by MountainTi

Yep. My garden takes up more ground.
I’d gladly turn off the auto trac and make a quick circle around that 150 square feet for $1800

That's what I don't get, it's basically free money. People should be careful what they wish for, if they chase the oil companies out with their greediness and cancel culture can you imagine the whining when their property taxes double , triple or more? This whole anti resource extraction thing is getting a bit old. These oil and gas companies, forestry, sand and gravel, coal mining, farming and ranching industries pay our bills. Our property taxes alone don't cut it.

[wwbirds]

Originally Posted by mac1983

That's what I don't get, it's basically free money. People should be careful what they wish for, if they chase the oil companies out with their greediness and cancel culture can you imagine the whining when their property taxes double , triple or more? This whole anti resource extraction thing is getting a bit old. These oil and gas companies, forestry, sand and gravel, coal mining, farming and ranching industries pay our bills. Our property taxes alone don't cut it.

I didnt really want a well here in the first place so the money has no bearing on my livelihood. I was told the resource doesnt belong to me but to compensate for disruption and gaining access they would pay a fixed fee annually. It is my understanding they could have angle drilled without ever having any need to come on my shooting preserve. they chose access!
Encana paid that fee for 10 years without fail. Ember resources knew the fee and even that it was subject to a review which had a 10% increase every 5 years. they bought or assumed the lease knowing this fixed expense. Would it be cancel culture and greed if my bank refused to take 30% less on my mortgage. How about my utilities or taxes would they take 30% less now that my revenues from all sources with resource sector and pandemic have taken a 30% reduction. Not too likely. Nothing to do with greed or anti energy attitude it is a long standing fixed expense for them.

[mac1983]

Originally Posted by wwbirds

I didnt really want a well here in the first place so the money has no bearing on my livelihood. I was told the resource doesnt belong to me but to compensate for disruption and gaining access they would pay a fixed fee annually. It is my understanding they could have angle drilled without ever having any need to come on my shooting preserve. they chose access!
Encana paid that fee for 10 years without fail. Ember resources knew the fee and even that it was subject to a review which had a 10% increase every 5 years. they bought or assumed the lease knowing this fixed expense. Would it be cancel culture and greed if my bank refused to take 30% less on my mortgage. How about my utilities or taxes would they take 30% less now that my revenues from all sources with resource sector and pandemic have taken a 30% reduction. Not too likely. Nothing to do with greed or anti energy attitude it is a long standing fixed expense for them.

Don't take it personal I didn't insinuate anything. Any landowner in Alberta, unless you own the mineral rights, only own's the top 6 or 12 inches of land(can't remember offhand), and has no right to block access to his land to explore for subsurface minerals. That's a nice contract you have a guaranteed 10 % increase on lease payments every 5 years, I've only got a review every 5 years nothing guaranteed.

[Rancid Crabtree]

The lease payment is for the impact on the owners use of private property.

The impact is far more than the surface that’s why it is registered on title.

The owner loses the use of his land including building sites or any other purpose he might want in the future.

Originally Posted by MountainTi

As we speak I just stopped and snapped a pic of an Ember well. Not much of a foot print. Farmed right up to the Tec fence. Looks to be about 25’x10’.
At $2000-$3000, how much is that per acre for rental?

Attachment 172177


No lease road. Just a 2 track that they will avoid as best as they can when in crop

[Jigger]

Originally Posted by mac1983

Had three wells drilled, 2 1/2 miles of lease road built, and a few miles of pipeline on my land in the mid 80's by Placer Cego, on about my 5th oil co. now with CNRL. Wells have been acid fracked, worked over many times, flow tested lot's, pump jacks installed high grade road built and power lines installed. Been involved in the oil patch most of my life so I understand it and know how to work with it. I'm not greedy by nature and have never had any trouble with any of them, quite the contrary actually their people realize this and go out of their way to accommodate me, as in where do I want pipelines and roads located, extra payments for workspace on repairs, they even upped their lease payments to me with no notice years ago. They are the best neighbors I have. On a side note my crops do better on the pipeline right of ways due to the mineralized soil brought up to surface and the warmer temps from the flowing pipelines, you can see it in the crops. Not only do I get to use the infrastructure they built ie: high grade roads and powerlines, their representatives(operators) have become friends of mine and notify me when city slicker poachers (wannabe hunters) trespass on my land and play stupid. So if during hard times they need a break on the lease payments I will allow it because times are tough and when the good times return I know they return to the higher rate.

Great post! Wish more people would think like you
Sure is nice to get along with neighbors.

[huntinstuff]

LongRun has defaulted on payments to me also.....

Got a nice letter saying they were going to default.....

They will pay when they can

I give O&G a break

But they're owned by the Chinese......so am I right or wrong???

[IL Bar]

Originally Posted by MountainTi

As we speak I just stopped and snapped a pic of an Ember well. Not much of a foot print. Farmed right up to the Tec fence. Looks to be about 25’x10’.
At $2000-$3000, how much is that per acre for rental?

Attachment 172177


No lease road. Just a 2 track that they will avoid as best as they can when in crop

They pick the target point. Landowner doesn’t get to pick it. In pothole country they can really screw up efficiencies in some fields with their well site and road locations. Equipment has gotten bigger. It’s not always as easy as just “click off the autotrac”. $2-3k is a pittance for the nuisance they can be.

Your last sentence couldn’t be further from the truth. They love big canola crops and real muddy ground. Gotta go in no matter what and use up every square inch of the lease then and can make a real mess. Which is fine if they are paying you for that lease but don’t expect to keep that lease for cheaper just because I’ve been farming the land they don’t mow or spray.

Ember, Trident and Apache. 3 swear words at our place. I wouldn’t mind seeing those wells leave. I just wish the government would’ve gotten more money out of them when they could’ve.

[Grizzly Adams]

Originally Posted by mac1983

That's what I don't get, it's basically free money. People should be careful what they wish for, if they chase the oil companies out with their greediness and cancel culture can you imagine the whining when their property taxes double , triple or more? This whole anti resource extraction thing is getting a bit old. These oil and gas companies, forestry, sand and gravel, coal mining, farming and ranching industries pay our bills. Our property taxes alone don't cut it.

Municipalities revenues are down significantly, then the province downloaded policing costs and a few other tidbits, guess who has to make up the shortfall, including education costs ?

Grizz

[Ken07AOVette]

I have had many run-ins with oil companies looking to save money. The best quickest way is a demand letter then lock the gate after notification. I have filed 20 statements of claim against a single company in the last couple years, they promise and promise until 2 years are up then tell everyone to get bent, 24 months plus a day since invoice or last payment and it is statute barred. They all know it.
Arbitration does nothing. They don't care about meetings.
I tell the companies that I my client and they would all be far better off doing it voluntarily, but will certainly file if they are not willing to be civil and responsible.

[mac1983]

Originally Posted by huntinstuff

LongRun has defaulted on payments to me also.....

Got a nice letter saying they were going to default.....

They will pay when they can

I give O&G a break

But they're owned by the Chinese......so am I right or wrong???

Watch LongRun very close...

I deal with CNRL they aren't going anywhere...

The Chinese...?

[jstubbs]

Long Run and their oil and gas assets were purchased by a group of Chinese investors a few years back. I assume they still retain ownership of those assets.

[huntinstuff]

Originally Posted by jstubbs

Long Run and their oil and gas assets were purchased by a group of Chinese investors a few years back. I assume they still retain ownership of those assets.

Correct

In the mid '70's when this started on my land, it was Bralorne Resources. At that time, you could control WHERE they went on the land

Bralorne sold to this guy, then this guy sold to that guy, and now its LongRun .....aka the Chinese.

[KC1]

Originally Posted by mac1983

Had three wells drilled, 2 1/2 miles of lease road built, and a few miles of pipeline on my land in the mid 80's by Placer Cego, on about my 5th oil co. now with CNRL. Wells have been acid fracked, worked over many times, flow tested lot's, pump jacks installed high grade road built and power lines installed. Been involved in the oil patch most of my life so I understand it and know how to work with it. I'm not greedy by nature and have never had any trouble with any of them, quite the contrary actually their people realize this and go out of their way to accommodate me, as in where do I want pipelines and roads located, extra payments for workspace on repairs, they even upped their lease payments to me with no notice years ago. They are the best neighbors I have. On a side note my crops do better on the pipeline right of ways due to the mineralized soil brought up to surface and the warmer temps from the flowing pipelines, you can see it in the crops. Not only do I get to use the infrastructure they built ie: high grade roads and powerlines, their representatives(operators) have become friends of mine and notify me when city slicker poachers (wannabe hunters) trespass on my land and play stupid. So if during hard times they need a break on the lease payments I will allow it because times are tough and when the good times return I know they return to the higher rate.

X3

[roper1]

They tried really hard about 15 years ago to put a well and a pipeline on my place. Neighbor let them in, he's not getting paid. I just didn't want the hassle or their caveat or their sluffing from one bad actor to the next worse one in a race to finally not paying me. Few thou a year just not worth the aggravation. I consider myself lucky.

[Big Grey Wolf]

Guys, many good points made, Low oil prices means Big problems for land owners. Another major point to consider when company puts oil wells on your quarter your property value goes Way down. If a developer wants to build an acreage subdivision etc. would not buy your quarter. The oil company basically owns the lease land as you cannot build anything on it like road, houses, water lines etc. It is bigger than just getting them to pay annual lease, you may have to do major environmental clean up on your dime$$.

[Sundancefisher]

Fixed costs like taxes and rent can make a low rate gas well uneconomical.

Shut in costs can make it more economic to abandon the well.

Is the revenue... even a reduced amount worth more than farming?

Also in the case of companies hanging on by a thread... if they go bankrupt the surface owner gets zero.

A reduced payment may be a fair reasonable negotiation as many leases were signed when NG prices were crazy high. We’re not there now.

How about negotiating a reduced amount with a clause that says if AECO NG sells for over $3/Cdn for more than 60 days that the lease difference must be paid?

[MountainTi]

Originally Posted by Big Grey Wolf

Guys, many good points made, Low oil prices means Big problems for land owners. Another major point to consider when company puts oil wells on your quarter your property value goes Way down. If a developer wants to build an acreage subdivision etc. would not buy your quarter. The oil company basically owns the lease land as you cannot build anything on it like road, houses, water lines etc. It is bigger than just getting them to pay annual lease, you may have to do major environmental clean up on your dime$$.

Actually oil revenue is a selling feature and increases land values typically, except for maybe Jane Fonda and Ted Turner

I've made around $50000 on my home quarter in oil revenue in the last 10 years. Pretty appealing to most that are buying ag land


Do you know any landowners that have had to do environmental cleanup on their own dime? I sure don't.

[Sundancefisher]

Originally Posted by MountainTi

Actually oil revenue is a selling feature and increases land values typically, except for maybe Jane Fonda and Ted Turner

I've made around $50000 on my home quarter in oil revenue in the last 10 years. Pretty appealing to most that are buying ag land


Do you know any landowners that have had to do environmental cleanup on their own dime? I sure don't.

Orphan Well Fund will cover abandonment and clean up. There is a timing issue and priority given to hazardous sites first. This happens if a company goes bankrupt.

[esher]

Orphan well fund is out of money, pal of mine was told they can get the wellhead cut off and you are on your own.

[Sundancefisher]

Originally Posted by esher

Orphan well fund is out of money, pal of mine was told they can get the wellhead cut off and you are on your own.

Strange.

That isn’t a correct statement.

They have $100 MM repayable loan from Alberta and $200 MM from the liberals.

They have contractor selections in progress to do work.

For your information, oil and gas companies pay for the orphan well fund. Horrible commodity prices and poor federal government policies helped collapse the Alberta industry as bankruptcies abound. While the US was bustling, Alberta languished badly.

Orphan well fund contributions continue to be increased.

Your statement of the process is completely false.

That being said if the well is a simple, cut, cap, abandon with a small surface footprint, a landowner may be able to start farming over top of it.

If their is contamination, it would still be orphan well liability. While there is still work to be done. Surface payments would not be payable normally.

[IL Bar]

Originally Posted by MountainTi

Actually oil revenue is a selling feature and increases land values typically, except for maybe Jane Fonda and Ted Turner

I've made around $50000 on my home quarter in oil revenue in the last 10 years. Pretty appealing to most that are buying ag land


Do you know any landowners that have had to do environmental cleanup on their own dime? I sure don't.

I don’t suppose having to clean up weeds such as kochia, Canada thistle,quack grass, group 1 resistant wild oats, or a lease road full of Shepard’s purse doesn’t seem like an environmental cleanup to you. They all come with a cost and take time and management to take care of. I’ve had to deal with all of the above. That’s why us greedy farmers farm every inch we can.

I’m glad you feel you are a billionaire because of your lease revenue. Bought plenty of ag land myself and feel these leases are nothing more than a liability. Have a couple that aren’t paying and I had to pay extra for the land because of these eyesores.