A plea from a concerned young man

All right, my Dad got an invite from the Utica Landowners Group LLC out of St. Clairsville, Ohio and he came back from the meeting with a lease from the Antero Resources Appalachian Corporation. He is considering signing it, and I looked it over and the lease does look favorable...but, I want some opinions from people that have dealt with Antero and if they have kept their promises on their leases. I am just very, very worried about water contamination and other environmental concerns here.

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Permalink Reply by Finnbear on February 28, 2012 at 8:54pm

What area are they leasing? What does the lease say concerning water testing?

Permalink Reply by tokudad34 on February 28, 2012 at 9:11pm

My Dad still needs to discuss the exact area where it needs to be done, but this is in Noble County, Beaver Township. As for Water Testing, there is a part that talks about Water Damage. It basically says that the Lessee shall maintain the quality and quantity of the Lessor's water supplies prior and at the completion of the operations done and also as deemed necessary by Lessor due to changes in water flow or quality, including but not limited to color, smell, or taste.

Permalink Reply by Billy Park Whyde on February 28, 2012 at 9:19pm

 Whats the duration, the unitization clause. any formation limitations, how much royalty % how much bonus, right of ways for pipe line, shut in clause, non reassignable lease, ect ect ect ect ect ect ,read here at GOM for no less than several months anyway! Then before you sign anything go to an attorney that knows more than divorce law!

 A mistake can cost your father millions, this is not the old they are doing you a favor!

Permalink Reply by tokudad34 on February 28, 2012 at 9:34pm

The duration is going to be 5 years from the date the Lessor signs the Lease. The Lessee will pay 21% of oil and gas gross proceeds. For pipes, the Lessee shall bury to a depth below 48 inches and will be marked by the Lessee. The width of the graded subsurface pipeline shall not exceed 30 feet, with reasonable additional width required for construction, reclamation, repair, and maintenance purposes. As for Bonus, it says that the Lessee shall pay a sum equal to $10 per net acre covered by this Lease. Oh, and my Dad owns 64 acres of land. I forgot to mention that.

Permalink Reply by tokudad34 on March 1, 2012 at 10:33am

They are. I was just quoting off of the Royalty and Gas Measurement part. My bad.

Permalink Reply by wendy on February 29, 2012 at 6:19pm

i understand your concerns.  i had them too, but there is so much good conversations on here and in the other landowner groups.  the first thing you shoud do is get into a Landowners Group in your area.  there is safety in numbers.  sign in on all of them and just read whats going on with other landowners. there are some very well educated people on these sites and remember; they own land and are or have been through it too.  they and i dont want anything bad to happen to our land either. 

 its a personal journey you will be taking and leave no stone unturned.  ask lots and lots of questions on these sites.  there are so many good people out there who will give you sound advice, but in the end its your decision.  if you cant find the answers your looking for get an attorney who has experience with the gas and oil companies.  you may feel more confident if you have an attorney who understands this business.  i had to go through an attorney to get some help because i wasnt the owner of the minerals to my land.  i had to use "The Ohio Dormant Minera Act" to get the rights to my minerals.  all worked out great!    

dont be in any hurry to sign with the first company that makes you an offer; the offers will come.  i dont know what people are considering a good offer these days.  i would say $4000 to $5000 per acre and 20% to 23% in royalties HOWEVER i signed about 6-8 months ago. i really dont know what is fair these days but i can tell you that for me and my family it was in my opinion a good deal.  anything we got was more than what we had before.  i took my time and i did my homework and i waited for an offer i felt was fair and i could live, with even if others were offered more than what i got. 

you may feel like you have to hurry and make a decisiion now; not true. im still happy with my decision.  you dont want to be taken advantage of but you want a good lease and good deal.   i went through it already and had the same feelings.    take a deep breath and hold on for the ride! lol!!  good luck my friend.

Permalink Reply by tokudad34 on March 1, 2012 at 10:35am

Well, as of this writing, my dad is part of the Utica Landowners Group now, so he is doing the "strength in numbers" approach.

Permalink Reply by tokudad34 on March 1, 2012 at 10:32am

The water damage clause is pretty much like that, word for word.

Permalink Reply by Finnbear on March 1, 2012 at 11:22pm

Mark McG,

Where did you pull that water protection clause from? I'm currently in need of some ammunition for a project I'm working on. I need a few different water protection clauses to compare and I need to be able to cite sources.

Permalink Reply by KFS on March 1, 2012 at 3:08pm

I know just enough to be dangerous (so consider the source!) but I heard from a fairly reliable source that the ONLY water testing that would likely stand up in court (Heaven forbid you needed to go there) is one that has been conducted by the EPA with a certified reputation and the ability to prove the "chain of custody" of the water from beginning to end. 

Permalink Reply by Tyler Morton on March 1, 2012 at 3:55pm

I know some have already posted about clauses and everything, but I feel obligated to post my opinion and a simpler viewpoint.

 

First off, I would strongly encourage you to wait, for a while, on signing anything mentioning Utica in it. People are out there pounding dirt because they were some of the first to sign Marcellus leases, when no one really knew how powerful the Marcellus was to become, and signed on at very low prices and or royalties. That being said, it seems the same thing is starting to happen with the Utica Shale. You may have the potential to capitalize quite a bit more if you wait for a while longer for a better price and more bargining power.

 

Number 2, no matter what, ALWAYS get a lawyer to look over any lease before signing it. Correction...get a SHALE GAS LAWYER to look over it...it may be more expensive of a visit, but they will save you or earn you more money in the long run.

 

Don't let the gas company pressure you into signing anything. They have no power over you until you sign that dotted line. If you dont know what you signed, legal terms included, theres not much you can do. Always get it checked out first.

Permalink Reply by Brian V. on March 1, 2012 at 9:38pm

This is all very good advise. Also, as a friend of mine recently learned, keep an eye on the market. Over here in the dry gas area offers have fallen from a peak in some areas of $6000/20% to $1000/15%. Also, make sure you speak with your neighbors and be sure if they or leased or who they are leased with. If a company ends up signing all the land around you while you wait for the perfect deal, what you will find is that only that company will be interested in your lease. The competition will obviously not want a lease surrounded by another comapies lease hold unless they plan to flip it. There is a lot to consider. Enjoy the game. If you don't learn something new everyday your not trying.

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