Seismic Testing

Evening, my grandmother just called us. She is 92 ..She is retaining the mineral rights to the property we own . She has just rec'd a certified letter to do Seismic Testing on our property. I've done tons of reading here, and am so thankful for this site. Grandma needs money plain and simple however she does not want the property destroyed nor do we. We plan on building there in the spring. They only offered her $5 pr. acre. Am I to understand the following to be true..

 

The property is located on the Nauvoo Rd, Morris Twp..There is a well located on the road behind her , the same road Three Springs is on is within eyesight.

 

WE are all trying to help Grandma make the best decision that benefits her now and us later? Make sense?

 

A. Does this effect  her current lease which expires in Jan 2011.

 

B. Does this mean the possiblity of a well?

 

C. Am  I right in concluding their is property damage after Seismic Testing .

 

D. Are they doing this to get in under her current lease which the snowballed her into signing for little dollars!! Which expires in Jan 2011

 

E. Should we as "locals" keep an eye on this property more than we do? Do to the possiblity of seismic testing.

 

F. Can she renew her current gas lease with another company ? WITH A much better offer?

 

G. If she is contacted is it possible so are the neighboring properties?

 

H. Can she always refuse Seismic Testing without effecting royalites from exsisting neighboring wells.

 

J. Is the Seismic Testing a part of the 640 acre tract she might be in under her old lease expiring in Jan 2011.

 

K. Can Grandma sign a NO WELL lease but still benefit from royalites of another well , if of course she is in a tract.

 

K. Am I asking to many questions? :0)

 

 

I am reading Seismic Testing companies are paid by the gas companies to help them locate gas  pockets? My terminolgy may not be correct but I think you will get the general drift of my questions .

 

Thank You , your help is appreciated. RobinSJ

 

Views: 1621

Replies to This Discussion

Permalink Reply by Robin Jackson on November 21, 2010 at 12:00pm
I believe I see an extension clause. I will post it here if anyone wants to see it..

The lease may, at Lessee's option, be extended as to all or part of the lands covered hereby for an additional primary term of five (5) years commencing on the date that this lease would have expired but for the extension. Lessee may exercise its option by paying or tendering to Lessor an extension payment of forty-five ($45) per net acre for the land then covered by the entended lease. Said bonus is to be paid or tendered to the Lessor by cash, check or draft, mailed or delivered on or before the expiration of the primary term hereof, and the depositing of such cash, check or draft in any post office, addressed to the Lessor (at Lessor's last known address as shown by Lessee's records) on or before the expiration of the primary term hereof, shall be deemed payment or tender as herein provided. if Lessee exercises this option, the primary term of this lease shall be considered to be continuous, commencing on the date of the lease and continuing from that date to the end of the extended primary term.

Am I correct in saying if they pay her before Jan 7th she is in her "extension" period..?? She has no say? Does she have a right of refusal?
Permalink Reply by Robin Jackson on November 21, 2010 at 4:01pm
There is no right to refusal. She was suppose to send a formal letter, certified to the company, for a chance to renegociate the terms.
Permalink Reply by Robin Jackson on November 21, 2010 at 5:00pm
She said she was going to send the letter. That was last wk..That letter wasn't requested via lease, just me who suggested she do it just incase. There is nothing in her lease saying for her to do it or is there any right to refusal . I wish I could renegociate for her due to her age!!
Permalink Reply by Brian V. on November 21, 2010 at 5:24pm
The right of first refusal clauses I've seen haven't had anything to do with the extension of the lease but rather at the end of the lease the company would have the opportunity to match any bonafide "top lease" or standard offer made should you choose to lease the property again.
Permalink Reply by Robin Jackson on November 20, 2010 at 1:35pm
I will get a copy of her lease and read it..so that I am prepared. Then I will share what we are dealing with.

I will also get a copy of the letter from Seismic company that has approached her.

What is top leasing? I remember our Gas Lease Guy telling me that wasn't good to do.
Permalink Reply by Ann Ticopa on November 21, 2010 at 5:18am
It's probably not as frequent, but the same company that holds the current lease does sometimes top lease.
Permalink Reply by Robin Jackson on November 22, 2010 at 10:26am
How do we do a top lease? She has an extension clause in her lease.

I've spent hours on the phone today..Later tonight I will post my adventure in helping Grandma. Tomorrow I will speak to the Landsman for the area if he isn't on vacation. However all said, she is locked into her old lease. They made that very clear..So I don't know that top leasing is possible.
Permalink Reply by Lynn Wigglesworth on November 22, 2010 at 11:14am
If she signed a lease with an automatic extension, she's stuck in that lease for another 5 years, if the company chooses to extend it. This lease hasn't been extended already, has it (they only get one 5 year extension)? She signed the original 5 years ago? It's a shame, but we have to be REALLY careful what we sign.

I'm not sure I'd send the company a letter...your grandmother's best chance might be for them to 'forget' about her lease until after it expires! Then she's free to make a new deal.
Permalink Reply by Robin Jackson on November 22, 2010 at 5:39pm
From what they told me she is in automatic extension if they send her a check or are working on the property..We aren't sure what to do because the Seismic company told us today that if we don't do it, it is in her lease, they were hired by the lease company, they will do it either way ..with or without paying here. The leasing company said they hired them. Once they do the testing it locks her back into her lease ..Her lousy lease of $45 pr. acre and no where does it tell how much royalites she is to be paid..Honestly..The landsmen is calling me tomorrow or after the Holiday. I'm not sure who I trust when talking to all these people. They all want to use the property and I bet no one is being truthful ..Her lease has no right to refusal and she has an automatic extension that will occur if work is being done , any type or they send her a check..Shall we play the hold out game? Not do the testing? They told me today if we don'tsign for testing they will skoot around her and she won't make money at all and it won't help if they want to put a well there..
Permalink Reply by Ann Ticopa on November 22, 2010 at 6:44pm
The legal minimum royalty in PA is 1/8 (12.5%). Some leases do however have provision for deducting certain expenses.

Since they have the right to do it anyway, there is something fishy about them insisting on her signing the agreement for seismic testing. Perhaps there is some provision in it that limits their liability. I also question that simply doing seismic testing is sufficient to consider the lease held. But I don't have the knowledge to suggest the best thing to do.

I doubt they handle gas-related cases, but North Penn Legal Services (legal aid) might be able to provide some information.
http://www.northpennlegal.org/index.php
Permalink Reply by Robin Jackson on November 22, 2010 at 5:41pm
Jan 7th 2011 is her last day..It has automatic extension and no clause for a right to refusal..

Seismic testing is being requested by third party company hired by gas company all confirmed via phone today.

There is a well directly behind her property. She has 45 acres.
Permalink Reply by Brian V. on November 22, 2010 at 6:15pm
It sounds to me that what you have been told by the lease company and the seismic company is pretty much the truth. Often we will doubt the gas companies because they tell us things we don't want to hear. I have been going back and forth with these companies for quite some time now. What I have learned is if you stay on top of what is going on with your lease and with those around you then they can't lie to you. Many landmen are very truthful and when they say they could just scoot around you they aren't lying. The drilling laws in PA are set up completely in the drilling companies favor. I have seen Declarations of pooling that completely cut out unleased parcels.

The reality is that 5 years ago and more people (including myself and my most of my family) gave little thought to signing a gas lease because drilling was almost non-existent in Tioga County. The leases are very clearly drawn up and in favor of the gas companies interest. Everyone wants out now that the game has changed but it is a contract. So, instead of fighting everything what people really need to do is find a way to understand the terms of their leases and get on the ball with what they need to do to look out for their own best interests.

I've spoken to some people lately over in Bradford County that have either had drilling, seismic or pipeline work or all 3 and the consensus is to know your rights, ask a lot of questions (to the right person) and have complete understanding of what is happening on your land. For the most part people have said the companies they have worked with have walked through everything completely with them so that there is not confusion down the road.

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service