Replies to This Discussion

Permalink Reply by Sage59 on August 7, 2012 at 3:10pm

Fang, do you feel that landowners have any reasonable legal recourse on old leases that only allow for smaller drilling units? If you were one of us, how would you approach it? Also, many old leases award the landowner access to personal use of gas for their homes. Do you feel that this can be addressed also? I realize that it is a two way street between owner and driller to achieve success, but is it feasable to have a better personal outcome? I am a working guy who just wants to do the best I can for my family. I want to feel that I have done my best with this opportunity, and not just waited to accept what others feel is best without question.

Permalink Reply by Sage59 on August 7, 2012 at 11:12pm

Thanks for your thoughts Fang. Straight to the point. There is a lot to absorb in this situation. Bottom line, a better deal would be more desireable, but I wouldn't be too upset with the minimum outcome if they drill on or under my property. Thanks again.

Permalink Reply by Frank Nesmith on August 8, 2012 at 12:39am

Are people truly realizing $1,000 an acre per month? Most people I talked to are only realizing $100 an acre after 2-4 months.

Permalink Reply by Marty Yavorcik on August 8, 2012 at 1:52am

Now do your calculation at 20% like it should be. How is it fair to have a pooled unit and some people in the unit get 20% and others get 12.5%? It simply is not, unless of course you are a 20%'er and don't care about your neighbors. 

And let's be honest for a second the O&G are not going anywhere. Of the nine producing wells, eight are in the wet gas window. On a post-processing basis, peak rates from the wet gas window of the play have averaged approximately 415 barrels (bbls) of oil, 260 bbls of natural gas liquids (NGL) and 3.9 billion cubic feet (mmcf) of natural gas per day, or approximately 1,325 barrels of oil equivalent (boe) per day.

Do the math on those royalties at 20% vs. your advocated 12.5%. 

Permalink Reply by 0i7okn54zwbdo on August 8, 2012 at 7:24am

"How is it fair to have a pooled unit and some people in the unit get 20% and others get 12.5%?"

 

Again with the fairness bullshit.  I was wrong about you, Marty.  I thought you were just a ponce.  Turns out you're a socialist, too.  Nobody is responsible for any contract that they agree to, right?  Good deal.  I'm going to call up my bank and tell them my neighbor has a lower mortgage than me and that it's "not fair" that I pay more than he does.  Can I get you to represent me on that one?  What's your fee?  Thirty pieces of silver?

Permalink Reply by Marty Yavorcik on August 8, 2012 at 1:47am

A recent decision by a Pennsylvania court garnering much attention has raised questions concerning the ownership rights to natural gas in the Marcellus shale formation. In September 2011, the court in Butler v. Charles Powers Estate reversed and remanded a trial court’s order involving the interpretation of a deed’s reservation language. The litigation on remand certainly warrants continued attention, but the procedural posture of the appellate court’s ruling and other considerations counsel against overreaction.

 

The deed in question, recorded in 1881, reserved to the Charles Powers Estate “minerals and Petroleum Oils.” The Estate sought a declaratory judgment that the reservation included the rights to shale gas. The trial court dismissed the claim, reasoning that ever since the Pennsylvania Supreme Court’s 1882 decision in Dunham v. Kirkpatrick, the law in Pennsylvania has been that a reservation of “all minerals” does not constitute a reservation of oil or natural gas.

 

However, the Butler court of appeals questioned whether the Estate was correct in arguing that shale was a “mineral” reserved by the deed and whether shale gas should be treated like coalbed gas, which generally belongs to the owner of coal rights according to the Pennsylvania Supreme Court’s decision in U.S. Steel Corp. v. Hoge. The Butler court therefore remanded the case back to the trial court to allow the parties to submit expert testimony on topics including whether Marcellus shale constitutes a “mineral” and whether Marcellus shale is similar to coal to the extent that whoever owns the shale, owns the shale gas. The court took no position on the ultimate answers to these questions.

 

The procedural posture of the case is particularly important. The court of appeals ruled that, at this early stage of the proceedings (which requires the court to accept as true all facts alleged by the Estate), it could not say with certainty that the Estate had no cognizable claim based on the facts averred. After the parties further develop the record with expert evidence, the court may well ultimately decide that: (1) a reservation that expressly includes “minerals and Petroleum Oils” but not “natural gas” does not reserve natural gas pursuant to the age-old Dunhamrule; (2) shale is not a mineral as the term was intended by the reservation; and/or (3) a generic reservation of “minerals” should not be treated as the specific reservation of coal was treated in Hoge. Moreover, whatever the ultimate outcome, the effect of the court’s decision may be limited to deeds, like the 1881 Butlers’ deed, that were recorded before Dunham was decided in 1882. Ever since Dunham, parties entering into deeds in Pennsylvania have understood and intended that if they did not specify natural gas in their reservation, then they did not reserve natural gas. Nonetheless, how the Pennsylvania courts rule on these questions has the potential to significantly affect the rights of parties that own rights to minerals or natural gas, and further developments in the Butlerlitigation should be closely monitored.

This is NOT a legal fairy tale but actually in the Supreme Court of PA. Look it up and read it. 

As a side note, I have agreed to represent my clients on a contingency basis and any fees to be earned would be if I am able to (1) win; (2) secure them a signing bonus; and (3) obtain any royalty percentage above their already existing 12.5%.   

Permalink Reply by Alan Pavlik on August 8, 2012 at 4:48am

That is concerning the ownership of the oil and gas rights as to who has the right to lease those rights vs what an oil and gas lease states, which is surface to the center of the earth unless otherwise stated in the lease. The Butler case is based on the thought that the gas or oil was extracted from a mineral, (coal) which in PA is a mineral. That is the agrument in that case.

Permalink Reply by 0i7okn54zwbdo on August 8, 2012 at 7:26am

Don't confuse him, Alan.

Permalink Reply by jb379 on August 8, 2012 at 7:45am

 Marty is only looking out for the good of the people, so please don't mistake his good intentions....it has nothing to do with the money....help him, help you....

Permalink Reply by Marty Yavorcik on August 8, 2012 at 8:01am

 Why don't you go to work for free? 

Permalink Reply by Marty Yavorcik on August 8, 2012 at 7:59am

It is obvious that it is greatly needed with the likes of the three O&G stooges; Alan, Marcus, and jb379.   

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