Hello,

My question is:

We had a lease with Gulf Port Energy on our land (20 acres) back in 2011 and no drilling ever occurred, and never happened for years. We did get our bonus money and was waiting for them to drill and hoping for royalties, someday. Then Chesapeake took over and we thought they would lease with us and it never happened. We called, but never got a lease, but, they said they would re-lease just before they were ready to drill, that didn't happen.  Then they sold to Encino Energy, and they started drilling the Deucker well, in Harrison County Ohio, that we are in. We were waiting to hear from them because we know they are drilling, and figured we would get a lease, as time goes on. Well, our neighbors said the royalty checks are looking pretty good.  We know they took out a permit and that they would be drilling under us to the road where our property ends. No question, we are in the pool.  I called Encino Energy and talked to the land man. He said there was some confusion, there were some old leases and that they would get back with me when they could get better clarification on what is going on.  A couple months go by and a few days ago we just get a large check in the mail from Encino Energy.  I call the land man and ask why we received a check because we don't have a lease agreement? He said there is an old lease from 1973 (48 years old) that they are going to adhere to , which is not a very good lease for us.

My question is, can they do that to us or should there be a new lease with us?

If anyone can help us with this we would appreciate it. 

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Get an Oil & Gas Attorney

Agree with Dott; get a good oil & gas attorney.  If there has been no production on the old lease, it's kind of hard to see how it could still be in effect for that length of time.  Don't believe anything Encino tells you; I have heard all kinds of nonsense from them.  They hire nice people to talk to you on the phone, but those people don't make the decisions that affect you.  Hire that attorney.

And do not cash the check

A lawyer can submit a release of property from a lease to the Auditors office to legally state that the old lease is no longer in effect if that is what he finds when he does a title search.  There will be a paper  trail in the Auditors office of deeds and leases etc. If an old lease was never renewed or property not producing (or held by production) in all of those years then it may have reverted back to you and this may be a possibility. Some O&G companies never submit the paperwork to release your O&G rights when they should have. However most O&G companies these days do there due diligence and physically send Landman down to the Auditors office to look through all of the deeds and get a paper trail before they pay bonuses etc.

Any suggestions to a good Gas & Oil attorney?  The one we used originally, wasn't knowledgeable about the O & G industry. He was with family of people in our church, but wasn't living in the area at the time.  We did alright in the original agreement, considering, but not as well as some others.  The next attorney that we used for part of our acres, said there was nothing we could do because the previous owners were under a lease and there was an active well on that part, so we lost 8 of the 19.7 acres to that and are making minimum royalties off of that well.  The other 11.7 acres are now under, once again, an old lease from 45+ years ago, though there has never been anything well on it, until now.  Once again, we are being told, we are under the "old" lease.  

Confusing to say the least.  So any suggestions to an attorney would be helpful at this point.

Thanks!

Steve,

You can type in "Attorney Recommendations" in the gomarcellusshale.com search box and get past posts with O&G attorney recommendations.

Contact Aaron Bruggeman, Bricker and Eckler, Barnesville Ohio.   They have some of the leading oil and gas attorneys in the State of Ohio, plus would be close for him to perform a title search on your property to look for that old lease.

That sounds very shady Steve. Gulfport signed a lease with you, if there was a lease from 1973, then Gulfport would have signed a amendment with you to amend the old lease. Don't cash the check and get an attorney. 

Call this attorney. He's extremely knowledgeable.

https://www.porterwright.com/christopher-j-baronzzi/

Call Huston Harbaugh in Pittsburg, Pa.  - Robert Burnett.  He is a master when it comes to oil and gas leases.  I had a problem with Shell and it took a few months but I got the results I wanted.  412-281-5060

Call Chuck Kidder at 614-717-1788, he has an office in Cadiz and in Dublin (Ohio) he is very familiar with what is going on with Encino.

Speak with more than one attorney. Share your situation and ask questions. An initial consultation should be free of charge. Try to do it in person rather than over the phone so that you can better evaluate how they handle themselves.. If Encino doesn't have a valid lease and they drilled under your property you may be looking at damages, not just royalties. In that case you want to make sure the attorney has solid litigation experience and not just contact experience. Ask them for references (and check the references).

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