Replies to This Discussion

Permalink Reply by David.M.Fackleman on August 26, 2013 at 11:16am

Had an existing lease Jim. That lease was signed by the previous owner in '08. That lease was $2,300 per acre plus 15% royalty. My wife and I bought the proerty in 2010. It's only 3 1/2 acres.

Permalink Reply by Thomas Lilli on August 26, 2013 at 11:42am

Jim,

I would caution that there are many many pitfalls to a bad lease that an uninformed land owner may be perfectly happy with on its surface.

Education will take a while and there are always things you miss. She may be happy until she learns all the liability she still holds by a boiler plate (for the O&G companies) lease.

Good legal advice is best in the case of leases with a "qualified" O&G attorney.

JMHO.

Permalink Reply by Gringo on August 26, 2013 at 12:15pm

With 3.5 acres, there is no reason not to get a non surface lease. That will take care of a lot of issues.

Permalink Reply by Thomas Lilli on August 26, 2013 at 12:48pm

My concern is the hidden liabilities that a land owner may subrogate from the O&G companies in a poorly written (to the benefit of the O&G company).

If nothing more, if money is not the object right now, you want to make sure you have all the protections a well written lease will afford you.

You want absolutely no liabilities associated with O&G production in your area or in the unit you are included in.

Permalink Reply by David.M.Fackleman on August 26, 2013 at 12:15pm

I take it they are open to negotiation? Money really isn't a big deal, but I don't want to get ripped off either. I just want what is fair, and $300 sounds like an awfully low ball # to me. But something is better than nothing. Again, my property is only 3 1/2 acres. I'm actually surprised Shell is even considering renewing my lease. Is it possible they just threw that low figure out there to see if people are desperate and would bite?

Permalink Reply by Ann Ticopa on August 26, 2013 at 1:46pm

A number of long time residents signed the Trenton/Black River leases (~2000-2007) because, after the initial discovery and "boom" in NW TC was over decades before,  nothing much everr happened.  Leasing was looked at as "free money"m with minimal possible downside.  

With 3.5 acres they're not going to put a drill pad on your property, but they could use it for a pipeline, road, utility line, and anything else on the laundry list in the lease. Consider that by leasing you might lose more in property value than you could gain in bonus $ (and, possibly, royalty).  There is no guarantee that if you refuse the new lease now,  you could lease later if you changed your mind.  But there a near 100% guarantee that if you do sign a new lease, you won't be able to get out of it for a minimum of 5 years.

I agree with Gringo, that a non-surface lease "[would] take care of a lot of issues." 

I'm disappointed that Shell is doing this. Fairer would be something like a 3 year option to lease at a reasonable bonus/royalty.  

Permalink Reply by Lynn Wigglesworth on August 27, 2013 at 1:35am

Leases with Shell are not really negotiable...even in the good times, they were usually 'take it or leave it'. With such small acreage you can get a non-surface, which takes care of most of the concerns (they aren't even allowed to set foot on your property without your permission; any pipeline, etc. requires a separate lease). There are a few addenda that they have for their leases, but you have to use theirs; you can't write your own.

Permalink Reply by David.M.Fackleman on August 27, 2013 at 12:40pm

I will be calling Ron Kline early next week...going out of town tomorrow...to discuss and possibly negotiate details of the new lease. I will definately stress to him, that I want a non-surface lease. I will report back on how it goes. Thanks for the help everyone, I really appreciate it.  

Permalink Reply by paleface on September 2, 2013 at 10:13am

Neal Well pad Chatham township Tioga County PA. 9-2-2013

Permalink Reply by paleface on September 2, 2013 at 11:13am

Permalink Reply by paleface on September 2, 2013 at 11:18am

Swepi frac sand towers and train cars delivering sand to the towers

Permalink Reply by paleface on September 2, 2013 at 11:21am

Swepi water tanks

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