Hite ruling against land delay rental holding non-producing leases...

I've recently come across a court ruling in Pennsylvania - Hite v Falcon Partners, No. 197 WDA 2011 PA Super 2 - that rules that leases that are out of the primary term (the first 2, 3, 5, etc. years usually mentioned in a lease as the time in which drilling must be commenced) can NOT be held just by paying the landowner the delay rental payments required within the language of the lease for future years beyond the primary term.  I have no idea how to post links here, but here is the address of an article explaining the Hite ruling more fully:

 

http://www.mgkflaw.com/specAlert2011/newsFlash-20110110-Hite.html

 

The basic idea of this ruling is that a drilling company that holds a lease shouldn't be able to tie up property that is under lease indefinitely since the landowner had expectations of recieving royalties when signing the lease, and if drilling operations were not started within a reasonable time, then the landowners expectations have not been met. That results in cause for the lease to be terminated so that the landowner can look elsewhere for someone to lease to that intends to drill within a reasonable period of time.

 

I'm no attorney, but for those of you with old leases that are tying up your property and making it impossible for you to sign leases that are more in line with todays prices and lease language, this ruling MAY be very beneficial to getting out of those old leases that many of you probably had no idea existed until recently...and that many of the companies holding those leases didn't care about either until recently!

 

Any comments or information from anyone here that DOES have a legal background or that has property that has had leases revoked based at least in part on the Hite ruling are more than welcome!  Thanks!

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:-D  Looks like the site makes links for you!
Go to the ODNR.  Ask them for a gas production report for the Well.  If they don't have it get it from the Gas Co holding the lease.  If no royalties have been paid, and the well is dead, that is, out of production, and the landowner or well lease owner had not gotten paid any royalties or delay rentals it becomes null  and void.  In many cases the old well and or tanks are in poor condition or leaking and the ODNR or EPA will come out and inspect and many times make the gas company pull the well.  That is what the landowners wants anyway because in most cases it cancels out any old lease.

How does this ruling apply to people in storage field leases?  I hear there are some very unfortunate people in storage fields with Columbia Gas or Dominion that have leases that state as long as they continue to pay the land owner 5 bucks an acre for storage per year, then the lease extends beyond the primary term and then they also continue to hold the rights to Oil and gas production.  Many of these leases go back to 1905. How is this really any different than a dealy rental situation?  Many of leases were essentially forced under the threat of eminent domain to create or extend gas storage fields under the premise landowner loses production rights so the storage companies can protect their storage fields.  But, now these fields can be drilled through and cased to protect the storage field.  So where are the eminent domain judges to demand the rights of production be given back to the people?????????? A good attorney should sue on this premise, or perhaps ther's even some kind of anti-trust law to help these people. 

These storage fields supposedly encompass perhaps 100,000 + acres in Marcellus and Utica rich territories. 

Columbia Gas and Dominion should be ashamed of themselves.  I read in a Loudonville or Wooster Ohio newspaper where Columbia Gas subleased storage field land to Chesapeake (I thought they need to protect their storage field). In the articler a representative from Columbia Gas stated that when Columbia gas decides to sublease storage land to a driller, then it is the land owner who is the primary beneficiary because they get a royalty.  It made me wonder who got the sign on bonus.  The wole thing sounded like a sham.  Shame on them.

This is true do you have a HOA group to be leased we want to talk to you.

 

We are a Real Company that want to drill and not a flipper.

 

Please get back to me we are from Houston TX.

 

Kelly

Leave me contact information please, Kelly.  I'm not part of a landowners group, but my neighbor and I are interested in leasing...between us we have somewhere between 1500 and 2000 acres, depending on how many of the old leases on some of the property can be released or terminated...
Hi Joe if you are in Columbiana County then you are probably in the Brinker Storage field Sounth of Leetonia.  This storage zone is in the Berea Sandstones only about 500 feet below.  There is a group called the Mohican Basin Landowners Association.  They have a membership of about 60,000 acres.  Look up their website.  When I heard about them I contacted Carl at 419-651-8969 to let him know that there are people in Columbiana County in the same predicament he finds himself, and his group  This group is in Wayne, knox, holmes, and Lorain County where Columbia has storage fields.  They found out that Columbia subleased their property to Chesapeake for utica drilling.  Carl was unnaware that there was storage fields in Columbiana County.  They have a highly knowledgable attorney Dick Emmens out of Columbus and are preparing to Challenge those old leases.  Combining property owners from each of the storage fields may help to add weight to their argument.  They have a small fee to join their group but you will find power in numbers there.  I'd urge you to act fast because I hear they are looking to bring this boat into shore very shortly.  Good Luck and get your neighbors to join you too.
I should have mentioned: Carl is one of the main group organizers.

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