Coal company permits getting in the way of gas leases

I was offered a decent bonus and royalty lease package from Rice for a small piece of property I own in Green Co., PA.  Signed the lease and then got the whole package back with them stating that they would not now sign it since there were active coal mining permits or active coal mining in the area so they were unable to get the permits they needed to drill.  The coal was taken out from under that area more and 20 years ago now.  I know because we had subsidence and lost our water, etc., etc. at the time.  The gas company atty. said I could find out what permits exist with what coal companies through PA DEP.  Wrote them an e-mail asking since couldn't figure it out on their web site and there is absolutely no phone numbers listed on their site to call (love the customer service ethic of our government!  NOT!), but have no heard back.  Has anyone encountered this and is there anything I can do to help facilitate the coal company allowing the gas company in there.  The gas company said that the coal company can give permission and they were trying to figure out if that was a possibility, but if I found out anything else, to let them know.  I'm REALLY frustrated, since the bonus payment is badly needed and I'm just irritated that it seems I'm going to miss out on any benefits of gas production in our area.  Thanks to anyone with info for me.  CHRIS

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Permalink Reply by Ragnars Repo on November 21, 2013 at 12:16pm
I'm sure some on here with law backgrounds can give you some clarification. If you badly need the money maybe the possibility of selling your gas/oil rights exists.
Permalink Reply by Chris Vaught on November 21, 2013 at 12:24pm

Yeah, I have gotten several offers for the mineral rights, and am thinking about that.  I wanted to make sure that there is no or little hope on the lease option prior to considering sale of the rights as I know that a lease and keeping the rights is the best thing in the long run.  I'm just so disheartened at this point.  So frustrating to get your hopes up and then have a curve ball out of left field come at you.  Seems that these companies get you one way or the other.  :-/

Permalink Reply by DDS on November 21, 2013 at 12:58pm

http://www.portal.state.pa.us/portal/server.pt/community/about_dep/...

Here are the phone numbers on the PADEP website

Permalink Reply by Chris Vaught on November 21, 2013 at 1:05pm

Thank you!!!

Permalink Reply by owner on November 21, 2013 at 1:35pm

The area under your land may still be an active or sealed area of an active mine.  Gas companies are required to work with coal companies if they wish to drill in an area of a mine or in a area that is projected to be mined in the next 5 years (not sure of the years, may be 10).  Drilling through an area of a coal mine or even in a sealed area of an active mine could be dangerous to the miners. 

DEP has enforcement offices in Uniontown for mining and they used to have a subsidence office in McMurray.  Both would have maps of mines in your area.     

Permalink Reply by Chris Vaught on November 21, 2013 at 1:44pm

Thanks for that.  Yeah, I get that there could be a risk for folks and am not arguing necessarily with the concept.  I'm just trying to figure out how long these active permits are good for after the coal is gone.  If my area is going to be off limits for another 20 years, then I'm better off selling my mineral rights and moving on.  

Permalink Reply by DA Saltsman on November 26, 2013 at 3:08pm

In some areas, if the coal company is still moving coal under your property there  is a clause in most leases that the surface owner will receive " wheel rights". And that is a % of the coal that has been "wheeled" from beneath your property or any other properties if it is a route that is usually the shortest point to the portal and an established route. It is usually a small % established in the original coal lease.......hmmm could have added up over these years-----good luck

Permalink Reply by Chris Vaught on November 26, 2013 at 7:48pm

Would have been a good idea if I owned the coal rights.  I have no idea who does own the coal rights and what that original lease would have said.  I think they have been gone (sold) for at least 80 years.  The people who owned the property prior to us had it for at least that long, and the coal didn't come with the property when we bought it.  I imagine it would take some digging to drum up the original coal sale agreement.  WOuld be interesting to see though, that is for sure.

Permalink Reply by owner on November 21, 2013 at 2:44pm

Do you know what mine is under you? 

Obama is trying to shut down as many coal mines that he can.  He is using the EPA and CO2 as a pollutant to shut down the power plants.  The Cumberland mine in your area fed coal to the Hatfield power station which just shut down.  Unless they find other buyers of coal, that mine may be in trouble.  The DEP can tell you if the area below you is still part of an active mine. 

Gas companies still have trouble mining through abandoned mines,  Can have trouble with the voids or openings from the mining.

Permalink Reply by Chris Vaught on November 21, 2013 at 4:27pm

Just got off the phone with PA DEP.  Looks like it is either Cumberland or Emerald.  She said there is active mining that is south of me now, but they are still using the tunnels to move the coal to the processor in Waynesburg, so likely the permits will be there for a long time.  And she checked and there are no active permits or wells for gas/oil in the area at all, so looks like the whole area is tied up for many years to come.  Oh well.  Was good to dream about.  I know I won't get nearly as much for the rights as I would if I kept it, but looks like if I kept it, it will get me nothing for a long time.  Thanks for your assistance.

Permalink Reply by RAYMOND bAUMAN on November 26, 2013 at 4:44pm

The oil companies can drill thru a mine in several ways but it takes much effort.  First they need to work with the mine to find a un-mined area  or work out a special casing plan for the mine zone it would involve setting casings  above and below the zone. Second there is a possibility that you may not have the mineral rights for the oil and gas under your property.

I would talk to the Oil Co about the lease and may be extending the primary term and or getting the neighbors together to  form a leasing group. another option before selling is to try to get the oil co to buy an option to lease the land.

Permalink Reply by Chris Vaught on November 26, 2013 at 7:45pm

I do own the gas/oil rights, but not the coal…those have been gone for a long time.  I was in a landowners group and I'm assuming that all of us in that area are in the same boat.  The LO group negotiated a really good deal for the bonus and royalty.  I was surprised that we got as far as we did in the process (i.e. I had the lease documents signed and back there - I live out of state, out West) before being notified that they could not get the permits they needed to drill because of the coal mines.  

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