Stefan J. Scholl
Attorney at Law
3280 Woods Way,
Suite 4
Petoskey, MI 49770
(231) 347-3836
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Stefan J. Scholl |
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Record Breaking State Oil & Mineral Lease Auction A successful natural gas test well in Missaukee County owned by Petoskey Exploration, LLC, a subsidiary of Canadian based natural gas producer Encana Corporation, has sparked unprecedented interest in natural gas exploration recently in Northern Michigan. In early May of 2010, oil and mineral leases on state owned land were auctioned off for a record $176 million. The average lease price was $1507/acre, with a high bid of $5,500/acre for a lease in Charlevoix County, significantly higher than the $26/acre average lease price in previous auctions. Collingwood Utica Shale Play Prompting what can only be likened to a modern day "gold rush" is interest in Collingwood Shale, which is present in Northern Michigan at varying depths, along with Utica Shale, which is also present at shallower depths. Encana Corp. disclosed that its Missaukee County test well flowed at a 30-day initial production rate of 2.5 million cubic feet per day, which is more than seventy times the typical Antrim Shale well production of 35 thousand cubic feet per day. Collingwood Utica is considered to be an unconventional natural gas play because it is more difficult to extract than more conventional Antrim Shale gas. To extract gas from unconventional shale plays such as Collingwood Utica, companies are expected to drill horizontal wells (a vertical well in which the lower portion of the well bore parallels the gas zone) to depths of up to ten thousand feet, and to utilize hydraulic fracturing or "fracing" processes to fracture the shale, allowing trapped natural gas to flow easily to the well. Millions of gallons of water along with sand at high pressures are used to fracture the shale. The gas which is trapped in the shale pores is then extracted out of the drilling wells, processed and sold through various pipelines. Oil and Gas Leasing Frenzy The huge potential of the Collingwood Utica shale play has sparked a frenzied rush to lease oil and mineral rights from private landowners. Northern Michigan property owners are being approached by landmen representing a number of different gas companies and being offered huge sums of money to enter into Oil and Gas leases. The negotiation of an oil and gas lease involves complex legal issues relating to the rights, privileges and obligations of the parties throughout exploration and production. Before entering into lease negotiations, it is imperative that landowners arm themselves with as much information as possible to ensure that the terms of their oil and gas lease are favorable and protect their future interests in their land. Fortunately, in this modern age of technology, there are numerous resources available on the internet to inform prospective lessors as to prices being offered by gas companies for oil and gas leases, and provisions which lessors should consider when leasing their oil, gas and mineral interests. Perhaps most importantly, however, landowners who are considering entering into an oil and gas lease should seek the professional assistance of an attorney experienced in oil and gas law to guide them through the process and ensure that their legal rights are protected. The Law Office of Stefan J. Scholl, P.C. Stefan J. Scholl graduated from the University of Michigan Law School in 1992 and established his law offices in Petoskey in 1994. Since that time, he has represented numerous individuals, partnerships, trusts, estates, corporations, limited liability companies, schools, municipalities and other governmental bodies in connection with a wide variety of litigation and other legal matters. Scholl is also a licensed real estate broker in the State of Michigan and specializes in the practice of real estate law, including oil and gas law and mineral rights, condominium law, construction law, landlord/tenant law, land contracts and mortgage transactions, environmental matters and real property taxation. Helpful Resources MSU Extension - Oil and Gas Leasing Resources for Private Landowners Michigan Department of Natural Resources and Environment - Oil and Gas Natural Gas Forum for Landowners - Discussion Forums and Other Resources Penn State Cooperative Extension - Natural Gas Penn State Cooperative Extension - Natural Gas Exploration: A Landowners Guide to Financial Management Oil and Gas Leases - Resources for Negotiating Lease Terms Cornell University Cooperative Extension - Gas Exploration and Leasing on Private Land: Tips and Guidance for New York Landowners
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Chesapeake Energy Horizontal Drilling Video
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Stefan J. Scholl, P.C. |