Many landowners across Pennsylvania are receiving solicitations by companies, partnerships, and even hedge funds seeking to purchase their Marcellus Shale natural gas rights.  It is critical to understand whether these solicitations are for a permanent purchase of your Marcellus Shale gas rights, or whether you have received an offer to lease your Marcellus Shale gas rights.

Many individuals may be confused when they receive these solicitation documents mistakenly believing that they are required to sign and return this paperwork as part of their ongoing commitment to their gas leasing company.  It is absolutely critical that NO PENNSYLVANIA LANDOWNER SIGN ANY DOCUMENT PRESENTED BY ANY NATURAL GAS COMPANY, OR ANY OTHER COMPANY OR ENTITY, UNLESS THEY FULLY UNDERSTAND THE CONTENTS AND EFFECTS OF THESE DOCUMENTS. Landowners have told me that they believed they we required to sign these Marcellus Shale gas right transfer documents, only later to determine that documents were unsolicited offers to permanently purchase their Marcellus Shale gas rights.

Although I hold the general position that landowners should avoid permanently selling their Marcellus Shale gas rights, I recognize that individual’s financial needs and requirements may lead them to the conclusion that permanently selling their Marcellus Shale natural gas rights is in their best interest.  Should a landowner decide that permanently selling their Marcellus Shale gas rights is in their best interest, I strongly caution the landowner to consider whether they want to sell their entire Marcellus Shale gas right interests, or only a portion of their gas rights.

For example, an individual who owns all the Marcellus Shale gas rights to fifty acres may want to consider selling 25 acres or their gas rights, or any other amount between one and fifty acres, while still maintaining a portion of their natural gas rights into the future.  I have unfortunately seen far too many occasions where landowners have sold their Marcellus Shale gas rights for a few thousand dollars per acre, only later to learn that they were going to be included in a unit, and because they sold their Marcellus Shale gas rights, they will not benefit from future royalties.  In most cases I have seen, the Marcellus Shale royalty benefits will far outweigh the short term financial gains of permanently selling Marcellus Shale gas rights.

I believe far too many times landowners are taken advantage of by these solicitations and do not fully understand the ramifications of their actions. I do not want to see any individual make a uninformed decision that they may regret generations into the future.  Again, whether or not to sell your Marcellus Shale natural gas rights is always an individual decision left to the landowner.  It is critical that the landowner fully understands the meaning and lasting impact of that contract before signing.

Douglas A. Clark, Esq. – Protecting Pennsylvania Landowners