Shell is backing out of leases in eastern Lawrence County

A guy my brother works with stopped over last night and told us after contacting Shell and inquiring where his money was, they tolf him they were cancelling his lease. He lives in Plain grove Twp., right off of 79.  They actually eluded to him they were low on money. What a joke. I still think there should be a law against this. If the landowner is bound the second he/she signs a lease, so should the gas company signing them.

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Permalink Reply by Jim Litwinowicz on May 30, 2012 at 4:55am

Lance; a lot depends on how the lease is written. When we had a group signing, we left with a signed copy that was signed by company officials, making it binding on both parties. Also, our lease stated that the only reason they were not obligated to pay the full bonus was a title defect. Same with our group in Mercer county.

I am surprised that Shell is backing out of a parcel in Plaingrove Twnp since they are currently drilling the Mayberry well.  I drove by the site Monday and there is a lot of equipment on site but it is hard to see as they located it behind a section of woods well off the road....the sneaky devils. Could be the parcel is far from a main line and they don't want the expense to run a line.

I also drove by the Twentier site and they have a large number of tankers on site so they must be preparing to frac that well.

Permalink Reply by Mike C. on May 30, 2012 at 5:32am

I have to disagree Jim.  Until the lease is paid for it is not binding.

Permalink Reply by Jim Litwinowicz on May 30, 2012 at 5:44am

Let see, you have a lease that is signed by both parties and is notarized. The lease states that the only reason that the may not pay the bonus is if a title defect shows up during the title work. Sounds pretty binding to me.

I am not an attorney but if they do not pay it looks like breach of contract to me.

Permalink Reply by Mike C. on May 30, 2012 at 5:57am

A contract needs three things: A writing, a signature and consideration.  Consideration = cash or a significant amount of reliance.  Good luck battling an O & G company on contract law.

Permalink Reply by Schnoozie on May 30, 2012 at 5:45am

He will say just about anything. Every one of his posts is an attempt to bolster his own credibility, act knowledgeable, gain trust, proclaim altruisim, then get more leads. It's called a sales cycle.

Its very confusing if you can't read in to it.

Permalink Reply by Jim Litwinowicz on May 30, 2012 at 5:52am

so you signed for less money, lower royalty, didn't get a counter-signed lease, have to wait to see if they actually pay it,  less landowner addendum, but I'm the bad guy here.

Permalink Reply by Schnoozie on May 30, 2012 at 6:09am

I signed for less money, with an established, local driller with local, full time employees that actually have a comitment to the area, I also signed a paper that gave them the specific opportunity to back out of the arrangement within 90 days if they chose to. That is their right, and I understood it completely. I would not go on a message board and cry about it, or brag about getting landowners something that was finantially unachievabe, like "18% gross with no deductions". You should also promise them a toaster or a fancy alarm clock.

I have had that economic myth from fantasyland explained to me by local people from EQT and Seneca. The big guns, will get their money, one way or the other.

And guess what. I got paid.

Permalink Reply by Jim Litwinowicz on May 30, 2012 at 7:18am

Your right, we didn't get 18% with no deductions. We got 18.5% with no deductions.

You got paid...good for you.  But a lot of people aren't getting paid. And there are lots of people that signed for less, some because they listened to you and the other nattering nabobs of negativity that post here. Others are paying a higher fee because they joined too late. Maybe you should some of your bonus money to reimburse them.

Permalink Reply by Schnoozie on May 30, 2012 at 7:27am

18.5% is and will always be a myth, fantasy, side show carnival barker Disneyland promise that is impossible to confirm with any accuracy, and unenforceable by the landowner. I took less, not much less. with a solid company.

I have also never influenced anyone to make a decision one way or the other. It's their land they can do what ever they want with it.

Had a Shell guy stop by the house the other day...one of the tricks they used"

Sound familiar?

Permalink Reply by Jim Litwinowicz on May 30, 2012 at 7:50am

Yeah, I still have his card here in my stack of stuff.

We have an audit clause to verify. Plus, if my neighbor that has a 15% royalty gets the same per acre as I get then I know they are screwing with me.

You certainly attempted to influence people with all your insults. Why else spend all that time on the attack?

Permalink Reply by Schnoozie on May 30, 2012 at 8:01am

No you don't. What you do have is an answer for everything, none of which is ever based on fact. I would trust that like I would a Contractor. Always a clever story.

I don't like seeing people decieved.

Permalink Reply by Brian V. on May 30, 2012 at 9:10am

I just found out about an interesting little loop hole to the no deductions clause some companies use. There are and will be "NO DEDUCTIONS" for "operations" such as separation, compression... on the lease hold. If there is no specific wording to the contrary they can deduct for those cost if they are done off the leasehold or on another leasehold. I am still trying to understand this but what is factored in is where the production is calculated at. Point of Sale or from the well head. Just another thing to consider.

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