HELP- new renewal Range Resource lease offered

We are due for lease renewal NEXT MAY not the current one coming up. 

Our property lies mostly in Beaver County (near airport). 

Went to a meeting maybe a month ago. Range offered all of us $3500/acre signing bonus and 17% royalty. They said they are offering us more than last lease so they could sign us up early as they are attempting to show a pipeline company that they have all the leases so that the pipeline company will put the infrastructure in place.

The kicker is they will only pay the signing bonus spread over the 5 year timeframe (1/5 a year) do to he fact of them being land rich and cash poor right now- can't sell gas till infrastructure in place to transport. ALSO if they drill at year 2 you would not receive the 1/5 of your signing bonus PLUS the royalty, you would only be guaranteed your royalty with a guarantee of $100,000 paid to you within that year. So if I was supposed to receive a $100,000 (1/5 of signing bonus) that year plus $20,000 in royalty for a total of 120,000 that year I would only be paid $100,000! So essentially they would short me for that year alone the $20,000 of signing bonus!  ALOT of us were up in arms but they said they have a ton of people signed so if we don't agree then they will essentially drill around us and not renew a lease...mind you we have well over 100 acres.

The other thing that has happened is Range Resources has contacted a ton of attorneys in the area and Range will be paying them $50 acre to get the paperwork done so now the landowner will not have to pay out of pocket. They presented it as if they were doing everyone a favor! This includes the lawyer many of us used in years past who we really trusted! Can you say CONFLICT OF INTEREST!?

Not sure how to handle this...Range has essentially gotten rid of all the competition since they have virtually all the land locked up.

THOUGHTS?

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Permalink Reply by A. Betz on April 17, 2015 at 12:49am

Hi Brad- don't want to put too much info out and hope you can understand why but we are in little town of Clinton which is maybe at most 10 minutes from international airport. 

Permalink Reply by Brad on April 17, 2015 at 1:19am
I understand Terri I just wanted to let you know if you were by the farm I mentioned he did not sign but everyone around him did and they all accepted far less than what you were offered I think it was around 1100 acre but that was around 2 years ago.
Permalink Reply by Jo on April 17, 2015 at 7:57am

Not a lawyer but sounds like collusion to me.  How can someone represent you when they are already representing the other side.

Permalink Reply by kit on April 19, 2015 at 5:51am

dear terri, our lease is up for renewel in may and statiol is paying us the same amount they did 5 years ago! We are not held by production. We found out our lawyer who reviewed the lease 5 years didnt really know what  he was doing. So i think were screwed. It says on our lease statiol has right to renew, but I am going back and forth with diff answers from ppl on here on what to do. My lawyer {diff attorney of course} charges 200 bucks to review lease. I dont know if i have a chance to renegoitate or not. Also statoil is wanted me to sign a rightaway agreement for pipeline now and I didnt know if I had leverage or not to use this or not to get a bigger amount on renewl.

thanks

Mike MurphyPermalink Reply by Mike Murphy on April 19, 2015 at 5:32pm

i think a ROW agreement and a mineral lease are 2 different contracts and dont see how you could use one for leverage in another 

Permalink Reply by Tim Tarr on April 20, 2015 at 5:55pm

You need a "no surface Rights" clause for Maximum leverage.

A "no foreign gas" clause in your lease will give you some leverage on "Foreign" gas pipelines. That is pipelines that carry gas not from your unit.

These O&G companies have many "Implied Rights" When you put your "John Henry" on the line next to that check mark. Than that wording in the Lease is difficult enough to comprehend let alone those Implied rights. Even O&G Lawyers are sometimes overwhelmed.

Permalink Reply by mark on April 21, 2015 at 1:04am

mornin folks

 tim tarr is right no surface is the way to go that "pesky" granting clause in the oil and gas lease can give them leverage (surface lease) can let them get there foot in the door and they could use it as leverage if they will only offer a surface lease the addenda "pipelines negotiated seperately from oil and gas lease" will help best of luck

Permalink Reply by Janice L. Hancharick on April 21, 2015 at 3:52am

What any company claims vs. what IS is not always the same thing.  Re-read that statement several times!  Is Range in business to do YOU a favor or themselves?  Part of what Range stated sounds totally believable.  It, like many other E&P firms ARE cash poor and land rich. (Farmers live in a world just like that!) Yet Range wants to expand the holdings.  The analysts involved have undoubtedly noted that rig count decline has all but come to a halt.  The Marcellus down only 1%, the Utica @ -7%.  Companies are trying to work within their budgets, but it appears Range is trying to s-t-r-e-t-c-h for a bigger piece of the pie.

Fancy verbage to get owners to sign has something sinister waiting in the wings.  Infrastructure in place or not ... yes the product must get to market, but due to the glut there is no market to take it to!  The best markets exist overseas, yet darned few U.S. ports are set up to handle our gas or oil. Call that politics!

Range knows what it's doing by signing up area lawyers to work for them, and you're totally correct in pointing  out  "conflict of interest".  I ran into that w/my 4-County Group when Marcellus first hit the news a few years back. No REAL  O&G attorneys were available for landowners, let alone a large Group. With considerable directions from professionals fully versed on all manner of O&G's ever-changing world, the group set it's own agenda and chose the CX Energy people to represent us @ the bargaining table.  Pricey?  NO.  Solid?  YES!  Experienced?  YES!

You and your neighbors have so much to be cautious about.  Range is likely drooling to set the timeframe for all this to  happen.  It's your play-yard.  Do your own thing ... no hurry regardless of what you're being told.

Neighbors helping neighbors is a great way to show Range you're all interested in leasing, but not their terms.  Good luck!  

Permalink Reply by KAY on May 1, 2015 at 6:39am

Be careful.  We signed a lease for a yearly payout over 5 years.  Range paid 2 years and then stopped paying.  Hired a new attorney and he said not only can they do this, our cancellation language was bad.  We have to ask Range to let us out of the lease.  Big mess.  Would never sign this way again.  Had an attorney who we thought was knowledgeable and had worked for Range.  Didn't go in our favor.

Permalink Reply by A. Betz on May 2, 2015 at 2:12pm

wow Kay now I am concerned...can I message you privately??

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