New Lease Contract

We are new to the potential of leasing our land to any energy companies.

Getting a lot of interest and offers from multiple companies. We have 200+ acres in Bradford County.

For anyone who has gone thru this process, what are the top 4-5  clauses or topics that we should be sure are included to avoid issues down the road.

Reading and hearing about all kinds of deductions, non-honest operators, etc. and wanted to gain the wisdom and insight of people who had gone thru it....what would you do differently or be sure to have in a  new contract if had to do over?

Best companies you have dealt with?

Appreciate all the help and suggestions.

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Permalink Reply by ray schmidt on October 6, 2014 at 11:13am

check out alov.us.there is a sample contract on bottom of page,a good starting point. also as you find time read this site..all county groups etc..best site for us land/ mineral owners..good luck

Permalink Reply by John Farr on October 6, 2014 at 1:13pm

Thanks. If you had it to do over, what would you add to your lease?

Permalink Reply by ray schmidt on October 6, 2014 at 1:40pm

cant say i would change anything at this point..we signed in april of 2011 and it was the alov.lease which isnt on web anymore but we were lucky to join such a large group which charged only $60.00 no matter how many acres you had..so if you had 1 or 100 the fee was $60.00..i heard about a lease called friendsville that people also said was good but never looked it up.maybe you can google it and get ideas from it..i wish you the best in your quest 

Permalink Reply by Barbara on October 6, 2014 at 11:27am

That is good news that you are being contacted about leasing your land.  Every bad thing you have heard about Chesapeake (at least our experience) are true.  Where are you located in Bradford County?  Some companies are stronger in this area then others so that information would be helpful.  We first signed without an attorney but used one the second time around which was very helpful and worth the money.  Best of luck!

Permalink Reply by John Farr on October 6, 2014 at 1:11pm

Athens Township.

Any recommended attorney's...up to speed on current issues?

Thanks for info!

Permalink Reply by Barbara on October 7, 2014 at 12:04pm

We use Michelle O'Brien of The O'Brien Law Group in Moosic, PA  570 209 7901

We were able to  email her the lease and she worked out all the details/.addendums with very good results.  She is an expert in this area and very nice to work with. 

Best of Luck!

Permalink Reply by John Farr on October 8, 2014 at 2:32am

Barbara,

thanks, much appreciated.

Permalink Reply by jett on October 7, 2014 at 4:36am

Make sure that you get a Horizontal Pugh clause and a Verticle Pugh clause (this keeps them from tying up your property indefinitely)

Clearly define what production means - is pulling a bull dozer onto the property considered producing or do they actually have to have a well pad set up and functioning - there's a big difference there.

Clearly define what gross royalty means - a net back clause is a bad thing.

Permalink Reply by John Farr on October 7, 2014 at 7:27am

Jett,

Thanks very much. Is their a way to simply add that the minimum Net royalty regardless of marketing/transportation costs is at least x%.

Appreciate the insights very much.

Permalink Reply by S S C on October 7, 2014 at 8:19am
Make it gross not net.
Permalink Reply by John Farr on October 7, 2014 at 11:03am

Thanks.

Permalink Reply by S S C on October 7, 2014 at 11:27am
You need a good experienced o and g lawyer to help you with the language. There are so many tricks to the wording.

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