Replies to This Discussion

Permalink Reply by Blindsquirell on October 18, 2011 at 5:01pm

Totally agree. Many problems surely. Hope the new lease was for enough money ....the 150 ac not developed would never be enough for another horizontal unit by itself. I would hope that the royalty made for the acres that are in the unit would be appreciated enough to allow the patient development of the area.

Permalink Reply by Blindsquirell on October 4, 2011 at 10:50pm

The only scenario I see this happening is that the HBP is for a specific strata ( shallow)...and a new OGL is for deep OGM rights. Or vise versa.

Permalink Reply by Finnbear on October 5, 2011 at 3:24am

That also would be the only legal scenario I could see.

Unfortunately, some unscrupulous land agents and some uninformed landowners seem to have gotten themselves into a pickle where the landowner (unknowingly? - ignorance is no excuse) signed a lease offer in which they agreed to warrant title. The leases were turned over to an oil and gas producer who, after doing their due diligence, discovered they had been defrauded by landowners who had accepted payment for leases they were not eligible to sell.

Permalink Reply by Blindsquirell on October 5, 2011 at 3:54am

If Im not mistaken and Im sure you know, there is typically a time period (90-120 days) in which the LESSEE determines the OGM ownership.  Also typical is an Affidavit of Non-Payment in which it states that no payments have been received currently or back a certain amount of time.  This Affidavit "releases" past unreleased OGL of record and also the owner acknowledges that he/she is not HBP or shut-in.  Ive seen it happen before where an outfit will sign and pay an owner quick and risk the discovery of severed interest rather than lose the lease to a competitor.  I dont see this kind of pratice now-a-days because of the enormous "bonus" money currently being offered for the deep rights.  Ive also witnessed an owner sign a new lease, knowingly understanding that they are under an older lease and putting the proof of determining that existence of record on the OG Co, just to get that "up front" money and betting the OG wont come back knocking on there door for the return of payment because of bad publicity or embarrassment or both.  So I could use the word "unscrupulous" on both sides of the fence.

Permalink Reply by Dan Warfield on October 18, 2011 at 5:51pm

I have heard, whether truth or rumor I am not certain, that a judge in northern Ohio came out to say that if an old oil and/or natural gas well had been in production for years (20+) and no effort had been made to develop that well into a deeper formation, such as the Marcellus or Utica, then the right to lease would revert back to the landowner to be able to lease these lower formations.

Can anyone confirm the validity of this issue/ruling or has anyone heard of this?

Thanks.

Permalink Reply by Paul Martinelli on October 19, 2011 at 4:26am

Wow...that would be a huge game changer in the leasing area.

 

Can you find out more....where di dyou hear of this?

Permalink Reply by Dan Warfield on October 19, 2011 at 5:16am

This info. came from a fairly reliable source (property owner) in a neighboring county.  I have been researching this, but, I can find nothing in print anywhere.  I am wondering if possibly this is a mistake/misinformation or maybe this could deal with the Dormant Oil and Gas Laws within the State of Ohio?

It would definitely be a game changer.  Once again, as its been stated before, it may have to do with the original lease from years ago and the wording concerning the formation the company was after at that time, i.e. Clinton, Berea, etc.

Other than guessing, It looks like its just another question for the O/G attorney??  $$

Permalink Reply by Finnbear on October 19, 2011 at 6:25am

I would go back and nail down the details from that property owner and move forward from there. Find out where he came up with that notion. Ask him if this situation was specific to his lease or to all old leases in general. There is so much misinformation floating around out there it is unbelievable. I wouldn't consult an attorney until I had some concrete evidence to present him because of the expense involved.

Permalink Reply by Dan Warfield on October 19, 2011 at 6:27am

Agreed

Permalink Reply by Scott Long on October 6, 2011 at 5:15am

 

I am surprised by how many people have the opinion that if someone is taken advantage it is their fault.  Not everyone is well educated, has computer resources, read blogs, etc.  I think just about everyone has been taken advantage of at one point or another.  Business ethics must be enforced to protect the honest citizens that do not know any better. 

On a side note, it is hard to put faith into attorneys; they are not always the most ethical group.  The everyday property owner works for a reasonable wage.  The attorneys for the land owners and the gas companies are the real winners here.

There should be a standardized contract adopted by the division of natural resources or some entity.  Why does the wheel need reinvented for every land owner?  The land owners should start out with a standard and understood contract provided by a fair 3rd party.  For the most part, the land owners want the same type of protection.  The specifics (royalty, cash bonus, etc.) could be adjusted, but the contract as a whole could remain the same.  It would be a lot better starting out with this contract and making adjustments, than it is starting out with a contract provided by the oil & gas companies.

Permalink Reply by Finnbear on October 6, 2011 at 6:57am

When you sign your name to a contract, you are bound by it in the eyes of the law. Ignorance is no excuse and if you know that you don't fully understand what you are signing then you better pay someone who does understand it to explain it and advise you whether you should sign or not.

Permalink Reply by JT on October 7, 2011 at 10:26am

A standardized one size fits all contract would not be free enterprise...

Free enterprise is the freedom of individuals and businesses to operate and compete with a minimum of government interference or regulation. It enables individuals and businesses to create, produce, transform, develop, innovate and compete in the marketplace. As they are able and willing, enterprising people produce goods and services for profit, offer their labor for wages and own the resources needed to produce and sell goods and services. In this system, no one forces people to be creative, productive or enterprising. Instead, they pursue what they believe to be best for them. By producing the goods and services that society values most highly, a free enterprise system results in the greatest efficiency, or lowest costs, of any economic system. It is the system most compatible with individual freedom and political democracy.

http://dallasfed.org/educate/everyday/ev5.html

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