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then don't call it a 'Pugh clause'....make a clause in the addendum that will protect your rights to lease what land they don't utilize for drilling or use in a unit. When a company pulls a permit for drilling they must tell at that time what land acres they expect to use for horizontal drilling and that is where the units are formed (so I was told).
Remember they are not working in your best interests financially, and they WILL MAKE MONEY with having your lease...it is your play at the time of the lease to establish what you can to negotiate your best interest.
The fact that they are wanting to pull out the Pugh clauses...tells me that I am right about they are not interested in making the landowner any money....in fact us landowners are only in their way of making more profit.
Pls whether you use an attorney or not...if your neighbors will listen and you all see the need to do your best negotiating NOW...cause you won't have that opportunity later and they will assign your lease asap to gain profit off what they negotiated with you. Many of us here at gomarcellusshale signed contracts cause the promises looked good, we didn't understand many of the clauses (and the landman certainly knew that) and we were focused on only three things...the upfront money, the royalty at gross, and the fact we could renew the lease in five years with a new contract and new negotiations (SO WE THOUGHT).
Now we find not only did they have the CYA clauses to negotiate and perhaps extend the lease whether we wanted to or not....but in some places the area (that wonderful PA mountain land) is soooo at risk for pollution now.
So take your time to do you lease please and hear the wisdom....The oil companies are not having any problem at assigning and selling leases and shares of their leases...so why would you if they don't want your land at this time if you don't meet their conditions? It's only going up in price (take a look at some of these discussions..) If you can tell I am not that happy about what they did in our lease is that they lied about the interpretation of some of these clauses to my elderly dad (who didn't want to use an atty and if he did he wouldn't have known which atty would have really helped)...I was present at all the discussions and my dad asked clearly several times about renewing the lease in five years (which we were told that it will be renewed but didn't mention what could keep us from being paid in the clauses)...we were told things that are contrary to what is in writing and urged to just sign and renew in five years....now he has passed and I am finding that this Pugh clause or some form of it surely should have been in the addendum.
http://gomarcellusshale.com/forum/topics/look-at-the-clauses-not-just
http://gomarcellusshale.com/forum/topics/getting-ready-to-sign-a-new
http://gomarcellusshale.com/forum/topics/assigns-clause-and-a-globa...
You could also put the wording that the contract regarding every clause (every clause) ends at the end of five years (if you are using five year) and that the lessee must renegotiate the contract at the end of five years. You must be willing to stand at contract time...I negotiated for my dad for the money part...but I did not understand the clauses at that time and had to depend on the landman and other property owners (out of state also) who also did not understand the unit clauses and assigns , etc. ...and of course the final decision was my dad's and he was very weary...we negotiated with Chesap. Chief, and Range over 4 months....and I must say the figures grew each month and now leasing is several more thousand per acre and we have been to the fourth year yet.
So do what you can to have more of the profit than the the skim of the skim. Cause you see unless there is sooo much upfront money to cover if they don't drill ....cause they may find ways to reduce that 15% you are talking about with using 'units' and you should surely make sure that if any surface drilling is done that you have a good payment at that time also.
AMEN AMEN AMEN
I have just received a check from Chesapeake for the GAS pipeline which will cross my property. I agreed to this in the first place because I thought I was obligated to it with my gas lease.
This contract was signed two years ago...........at that time I was told pipeline would be done in the next few months..............wasn't, so that is why now I get the payment....
This check was for more than I had remembered calculating two years ago............YEA!!....wait, not when dealing with Chesapeake. About two or three months ago, another landman came here............he wanted a buried water line to be placed to run parallel to the gas line. This is when i learned that the 'fresh water' that they say will be in these pipes is actually FRACK water with four chemicals removed at the well site.
No way did I want to give up yet another twenty-five feet of right-of-way on top of the fifty already taken for the gas pipeline; no way did I want this horrid fluid running through my land forever. Thus I signed NOTHING and was very clear to the landman that I was totally opposed to the whole proposition.
He came again once.............I told him the same thing. He was offering $5/foot as a one time payment.
I added what the waterline would have paid to the remembered amount for the gas line....................THESE CRUMBS HAVE ADDED THEM TOGETHER with out me having signed ANYTHINGor APPROVED anything..............they tell me the gasline lease, which I HAD run past a lawyer, gives them permission for MULTIPLE lines at their discretion. It's in there..............NEVER would I have left it that way when I signed; my lawyer really let me down. AND the original landman for the gasline had told me just the one gas line and a one-time dig. People tell me that there is no way it will be a one time dig.
BEWARE EVERYWORD THAT IS UTTERED AND WRITTEN. I am meeting more and more people who are discovering the subterfuge within the 'deals'.
Barbara...thanks for sharing...I tell you more here should share what they can so the next person will do much better as a landowner in their signing for ROW's and for natural gas leases. That is loving thy neighbor as thyself....clearly the gas company that did you wrong wasn't interested in showing you the proper respect as a landowner.
Would you pls consider posting your above post in this thread discussion? It might help someone.
And in Sullivan County board discussions we have a discussion about Pipeline leases ...your post would also be welcome there.
http://gomarcellusshale.com/forum/topics/getting-ready-to-sign-a-new
http://gomarcellusshale.com/group/sullivancountypa/forum/topics/pip...
I saw theseon Marcellus Drilling News web site:
http://essentialdissent.blogsp... 3 videos by N.Y. landowners
http://fleased.org N.Y. lease problems web site
http://www.museumoftheearth.org/outreach
These are landowners & issues fom Marcellus leasing and drilling in New York state. Note that there are differences in N.Y. and Ohio law, but still things to consider before leasing.
ALOV got a lease with CHK that does include a Pugh clause. See the ALOV Lease for what CHK IS willing to do if you push them. They are most likely not going to do this for an individual but if you bring them a pool of land they will deal with you.
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