Having just read on another site about a oil/gas company check being returned, I realized a few folks throughout the PA Marcellus have adopted this action. This has happened when a lease has expired or is near its expiration date, and the O/G company wants to maintain its hold with little if any improvement upon the first numbers and/or clauses agreed upon. Figuring the person receiving the check will cash it without much fore-thought, the stage is set for another 5 yrs. or longer.
Folks are catching on! They don't have to cash these checks. They can send them back, and request a Letter of Surrender ... documentation from the O/G company that proves the lease is no longer valid. It's likely at this point that a company landman will appear on your doorstep --- again! However those choosing not to open that door can open another one for a better leasing experience ... allowing better clauses, higher numbers, and more protections than anyone knew were needed a few years ago. We're understanding more and learning to take our time.
I've read and heard of this company ploy(an unasked-for-check) being used in Tioga, Potter, and Westmoreland counties. That's a good spread of territory so it's likely happening elsewhere.
Anyone who can validate this scenario happening in your county, please give the rest of the GMS readers a heads-up!
Fang - Do you perchance see/observe a 'predatory' manner in the way that leases are handled by G&O Co.'s? - that there DOES tend to be 'company 'x' signing a particular area...isn't that 'capitalizing' in...there's a word for it - and it's not coming to mind...monopolizing? - is that it? Yes, I believe that 'MONOPOLIZING' is the correct wording....
As far as 'flipping' leases...IS it perhaps wise to have this wording included (for LANDOWNERS protection):
"Lessee shall not assign this Lease to any other operating company without Lessor's written consent." - wouldn't THAT at least hopefully protect a landowner from LEASE-FLIPPING?
Would THIS perchance in the case if a 're-negotiated lease term' be *advantageous to the landowner? THEN they'd at least be kept abreast of WHAT is taking place with *their lease* - at all times, IF the 'G&O Co.' were going to 'assign' their lease.. whether by way of sale or exchange to any other G&O Co. - or whomever - pipeline co, any other affiliate.... The LANDOWNER would need to be NOTIFIED as 'well' as their SIGNATURE of 'approval' before any such thing is done. Correct?
***G&O Co.'s DON'T 'tell you' when they 'sell/flip' YOUR LAND...you'll maybe hear about that from a neighbor, or by going to -or calling- the courthouse every so often...it can be a problematic scenario for the LANDOWNER...Fang & Frank BOTH want to aid the landowners into *EMPOWERING THEMSELVES* in matters that may or may NOT be 'obvious' as of yet...time does tell...TIME always does.
As one light lights another, nor grows less - so nobleness enkindles nobleness. Pay Attention, people - and you will begin to more clearly SEE who advice does help 'you & me'...
Yes I see a predatory manner to the operations of the oil and gas companies. My reason for responding to this thread is that companies such as CX/MP also act in a predatory manner. The sad part is that they act as the friend of the land owner, complete insincerity and they do it through their channel partners who are member of the community. These channel partners prey on their neighbors, friends and even their relatives. It's sickening, I don't know how these people live with themselves.
Land owners should make sure that the assignment clause of their lease requires their notification and approval of an assignment.
As for land owners with old leases: they do have some power. These old leases may need to be amended in order for them to be useful to an o&g company. First; land owners should not sign these amendments. There is room for negotiating changes to the lease favorable to the land owner. Of course they will need help with the negotiations. I know people and firms qualified to help, anyone is free to contact me through a PM.
Again, don't sign an amendment.
Thank you for wise advice - people do learn & pay attention here to what Fang is sharing. Wisdom. I know what you mean - no one likes to see things 'go badly' for anyone...BUT the old principle of 'you can lead a horse to water, but cannot make him drink'...unfortunately 'holds true'....
As I've stated before - whether you are re-signing/re-negotiating a landlease -or- freshly signing (or heavily pondering doing so...) it also MAY be wise to 'join' with a more CLOSELY TIED land group. I recall a social studies teacher in HS saying that 'the government closest to you does the most for you'...they same would hold true concerning your closest, personal group of landowners. So by YOU breaking things down into a potential manageable land group - MAY be beneficial.
HERE is the only possible bollox - that your 'landgroup' would perhaps not be the 'drilling land block' that the G&O Co. would put together. But I don't think that you should let THAT thought 'throw you off'...especially in negotiating WHAT specific areas worth addressing in a land lease. I'm trying to address all 'corners' again....
Believe it - THEY have their 'ducks' in a row...shouldn't YOU? You don't want to end up like a 'local fair's game'...just going round & round - getting 'picked off' for the big-deal junk stuffed toy...'do right' by YOURSELF.
As one light lights another, nor grows less - so nobleness enkindles nobleness.
Hey - Fang...sorry for any 'heat', but I know you know...I'm sure you'll read from other 'discussions'. anyway - here is another idea:
Instead of 'large landowner groups', maybe within the LARGE group (or even within a 'manageable LANDOWNER group' itself...)...perhaps a '640 +/- acre LANDOWNER block/group' itself would be better able to dictate for itself with a G&O Co.? Let's say a 280 acre farmer/landowner was contacted for his land. They would THEN contact other 'neighboring landowners' together together & create their own landgroup?
Like I shared in other post - maybe THIS IS already being done...I don't know from what I understood, LARGE 'landowners' were forming one huge 'group' together...NOT in the manner suggested here. Maybe THAT would be a better solution?
As one light lights another, nor grows less - so nobleness enkindles nobleness. Shalom.
I love the heat, gets my pumped up.
The small group organized by neighbors and friends is the best way to go. Shouldn't be any larger than a township. Organizing themselves will save hundreds of thousands of dollars.
Why give your money to channel partners and their blood sucking company ?
Small Groups = more independent manageability, better negotiation possibilities.
Also - with 'organizing' - would it be wisest to also set up discussions on HOW to 'handle' any monies...such as how to prepare for trust situations - or other ways so that they can hold on to as much as what they get, than not...THAT too is quite a somewhat overcoming 'technicality' that unfortunately tends to get overlooked.
As one light lights another, nor grows less - so nobleness enkindles nobleness. Stay independent, yet wise in you 'grouping' endeavors.
Fang - there is always a 'new side to the coin'...what has changed, what has stayed the same. It MAY take some work - but individuals should NOT be shackled with an 'old lease'. There should be newly addressed issues concerning such leases. It was never thought that things would end up being how they presently are - until not too long ago...THAT should have some weight concerning landowning individuals...it just needs addressed.
NEW LEASES for NEW DRILLING ENDEAVORS.- cuts to the 'chase'!
Where there is a will there is a way. Determination. Anything is possible (still...in America - heck, they can 'CHANGE the constitution'! - what's so hard about THIS?!)...just a thought.
As one light lights another, nor grows less - so nobleness enkindles nobleness,
I've got it - a new law concerning G&O contracts - that if they were signed 'x' years ago...when the lease is expired - and no well has been drilled...that the LANDOWNER cannot be held by ANY wording of any 'old lease'...I don't know all the right wording, but that is a start - I know you've already thought it out quite well already...anyway - the 'old lease' does NOT hold with the 'new technology' - only with the 'OLD' drilling endeavors...it may fly (if it gets pushed hard enough - the SQUEAKY WHEEL gets the OIL!)...hope springs eternal.
what are you saying I can not make soup out of this response
As I've stated before, the way to deal with old leases is to wait like the cat waiting for the mouse.
Sooner or later the o&g companies will come around and ask for an amendment to the lease. Land owners should say no and ask for a renegotiation of the lease. The o7g companies can't use the lease without the amendment.