Beware of all the gas companies!
I signed two lease's back in 2011 with Gulfport Energy on 80 acres that I own in Belmont County, Ohio. Let me start by saying don't believe anything that any of the land men tell you, the are working for the gas companies and their own benefit not yours period. While I was negotiating my lease with several companies at the time in 2011. I clearly explained to them that any lease I would sign would require a Pugh clause, and that I would not except any lease that required me to pay any of the cost associated with the production or marketing of the finished product from any wells drilled onto my property. I ultimately ended up signing with Gulfport Energy because of the higher bonus payment and higher royalty percent, and the land man assured me the Pugh clause and the deduction clause weren't a problem, that a lot of people were requesting it. Well the land man was lying through his teeth after receiving my first royalty check and statement there were $14,574.11 in total deductions. Beware of any lease that includes the language below.
"All oil, gas or other proceeds accruing to Lessor under this lease or by state law shall be without monetary deduction, directly or indirectly, for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and marketing the oil, gas and other proceeds produced hereunder to transform the product into marketable form; however, any such cost which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from Lessor’s share of production so long as they are based on Lessee’s actual cost of such enhancements. However, in no event shall Lessor receive a price that is less than, or more than, the price received by Lessee."
It was explained to me that this was exactly what I wanted and that the second part of this clause only meant if they did any advertising to enhance the selling price of the finished product I would have some associated cost from that. Well I have since found out that this is the language that the big oil companies have adopted to lead land owners to believe that they are getting a no expense deducted clause in their lease. If you find this language in your current lease be assured be ready to pay every single cost that is associated with bringing the product to market. Don't sign it! Ask clearly for a no production cost clause and have it reviewed by a gas royalty attorney.
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Replies to This Discussion
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Permalink Reply by NY Gas Rights on
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Darlene there is NO such provision in any lease that you pay back any royalty received. To be paid means the gas was produced and sold. What you wrote is nonsense.
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Darlene please explain how you got caught in something that made you pay back anything to Chesapeake. There is nothing in any contract other than fraud that causes a refund to the gas companies. So exactly what did you do?
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Permalink Reply by Darlene Newton on
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Yep Repo
You say I did not complain, I most certainly did! My neighbors also have! Point being I did and I did talk to people!
They have a hell of a lot more money than I do!
They know the methane is in the water , their land man have been there! When we discovered the gas, we were working with Chesapeake at the time and agreed that it would clear up and not to say anything they would take care of it, says the land man!
Well they did not ! The water tester flat out said it would NOT go away! If you think I am going to pay for the clean up you can forget that! To be perfectly honest with you I have really just started to be more verbal because I am seeing people making some very bad choices!
A little note: My neighbors did turn them in their well is ruined and Chesapeake still claims it is not from methane! (as well as MY complaints!) Then we are the ones that get debriefed by DEP and told its in our heads!!!!!!!!!!!!!!!
So Ragners if you have the money then the fight is on! I do not, they do!
Regardless of whether I receive royalties or not when one destroys a water source it only takes time for people to see with their own eyes! As far as credibility I could careless if you believe me or not! Time will tell! !!!!!!!!!!!!!!!!!!
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Permalink Reply by Darlene Newton on
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Permalink Reply by Philip Brutz on
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Darlene,
Did Chesapeake do a baseline water test before they drill your well?
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Permalink Reply by Darlene Newton on
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I believe they did , we also have a water anylasis that THEY did!
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Permalink Reply by Darlene Newton on
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Do Not Know!
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Permalink Reply by Darlene Newton on
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Anyway guys I gotta give myself a break ! I cranked enough and I get myself upset and there is nothing I can do! But with that note I truely wish you all the best , I want you to hear my story so YOU make sure YOU can cover YOURS!
Darlene:)) Good Luck
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Have you reported your well to the EPA? That is what they are there for. Have you requested they come and test it? If you can get them to document your well issues you will have an ally.
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Permalink Reply by Darlene Newton on
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There comes a time when a person has to sit back and let
things happen and I will tell you why!! I am in a position where people are to afraid to speak because of the retaliation of the gas companies! In that, my husband opposed being vocal, which in turn has helped to destroy our marriage!
In my very young life I have learned that sometimes people need to find out on their own! This being said , in my past when I have spoken the first thing said about me is I am retaliating or you cannot say anything or you are a whiner! Right JREWing?
My stance now is I think it is despicable and I am not going to kill myself making people believe because I am so sure that I am positively right. EPA has intertwined themselves with these gas companies and do not think they are not!
As well as Heath Care this is also one of those instances!
I would almost think that you are some one I know! My heart is truly for what is right!
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