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Permalink Reply by 0ym9x5ag7ury2 on October 31, 2015 at 3:04am

This lease sounds odd enough and old enough to be full of "Loop Holes" that could cancel the lease.

I'm betting no one has produced for years and the landowners have failed to cancel the lease.

Read the lease and mark up the points that you believe the producer has failed to follow over the years. Take this to a lawyer and  he will advise you on how to cancel the lease.

Also if the producer wants you to sign something, they know the lease is no longer valid and want you to sign a document to allow them to keep control of your gas rights.

Greedy people aren't smarter than you, or they wouldn't be Greedy!

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Permalink Reply by William P.Milchak on October 31, 2015 at 2:29pm

Hi Ron,

We had 5 properties of which 2 had clear leases and we were able to sell the leases. We have 2 others that the oil company who bought our 2 leases could not produce a clean title and they did not want to take the risk on the leases being dirty. The property I am referring to is a 5th property of 180 acres and the oil company's attorneys think our lease is good, but we have just the oil rights. 

I am hoping one day we can offload the 1/2 we have.

Thanks

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Permalink Reply by Heidlebergman on October 31, 2015 at 8:04am

This is fairly common. It goes back to the Standard Oil Days. You'll find leases like this in western WV, Southwest PA and eastern Ohio. Natural gas was a nuisance back In the day and companies like Penzoil only wanted the oil...so if they hit gas a lot of times they would sell the well and the rights to the gas to another company like Hope Gas. Vice versa if Hope drilled a well and hit oil they would sell the well and the oil rights to Penzoil (South Penzoil) to be exact. As long as the well was producing, the rights for both commodities were held. So, a Penzoil oil well would hold the gas rights for Hope. Can you legally drill a shale well that makes condensate without rights to the oil?...lol. I know in WV that question has not been answered. As of right now in Appalachia companies would only be securing oil rights to clear up the title so they can produce the condensate.

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Permalink Reply by Barry D on October 31, 2015 at 1:27pm

William,

Has is the lease being maintained in force?

Is there a well(s) holding your property?

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Permalink Reply by William P.Milchak on October 31, 2015 at 2:22pm

We have held the lease for about 50 years. Paid the taxes annually. We had some interest from a company recently to buy the lease. They did a title search. What they found was we have the oil and as I noted a small drilling company seems to have the gas rights. This "oil only" found the company who was buying leases gun shy. Maybe what Heidlebergman shared will play out. Maybe the drilling company with the gas lease will eventually drill and find oil. Guess we will sit it out!

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Permalink Reply by Barry D on November 1, 2015 at 12:19pm

William,

Are there any wells on the property? In particular a gas well owned by the small drilling company?

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Permalink Reply by William P.Milchak on November 2, 2015 at 1:17am

Good Morning Barry,

 

Godd question. I reside a few hundred miles away and have never set foot on the property. Somewhere in my bundles of legal/title papers I have the name of the company. They are based in Erie I believe. The company we were working with to sell the leases contacted the Erie driller and all I know is they were not interested in our 1/2 of the 180 acres.

 

As for the other properties with the unclear leases, have spoken to a few local attorneys about a new title search and they want in the neighborhood of $3000 per lease or $9000 and we don't want to go down that path.

 

Thanks Barry

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