When Leases Term & Things Pick Up

Hoping we don't see a lot of Forced Pooling Applications to the ODNR to pool lands / landowners into substandard tailgate leases. That's always been of serious concern to me - and don't know why it doesn't seem so to everyone else.

That's why I think Ohio needs to either revise force pooling rules to provide a modern land / landowner cognizant Leasehold with a minimum $3,000 / acre sign on bonus / paid up front delay rental and at least a 12.5% guaranteed royalty - or repeal force pooling / force unitization laws / rules altogether.

Something like that would need to be applied to all Ohio forced pooling / forced unitization applications for any long horizontal bore in any strata / for all pooled acreage amounts - HBP or whatever.

All as it always is, only IMHO

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Permalink Reply by Joseph-Ohio on November 29, 2015 at 12:45pm

A revised list of Landowner / Lessor Considerations suggested to be included in any Long Bore Horizontal Force Pooled / Force Unitized Leasehold Agreement follows :

1)  a minimum $ per acre sign on bonus / delay rental payment to cover postponed development / production

2) a minimum landowner royalty % 

3) lease (and sales) agreements to be 'strata specific'

4) royalty payment based on all extracted / harvested BTUs without deductions and with payment based on sales as / as if to a non-affiliated ('arm's length') customer / purchaser

5) production and royalty payment calculated independently for each lateral traversing a lessor's land and a maximum 640 acre unit size for any single lateral

6) allowance of course for negotiated deviations

7) a minimum $ / leased acre shut-in clause paid to the lessor

 

8) 'No Surface Disruption' unless negotiated as a line item and for additional compensation

9) any Real Estate Tax Increases due to Development of any Natural Gas and / or Oil Well to be borne by the E & P / Developer / Lessee.

The above list STILL only names a few that I can think of at this point in time.

I would like to see all readers add their suggested options / improvements to the above list.

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