Replies to This Discussion

Permalink Reply by Philip Brutz on September 9, 2011 at 8:18am

The gas rights are probably not affected by still having the coal rights. If you sign a gas lease they will probably pool you with someone that does not have the coal rights and then use the “Force-majeure” clause to lock you in the lease without paying you a “shut-in royalty” until Murray finishes the mining in your area. I am not a lawyer!

Permalink Reply by SA Frank on September 9, 2011 at 8:27am

I am not sure that the Force majeure will fly as the the mining known issue prior to the lease.  Companies leasing in the mining areas will have to work with the coal companies to drill, but I don't think they can lease then use it as an excuse to hold acreage indefinitely (just my opinion - not a lawyer either).  Kind of like buying a house listed as "as is" condition.  You know what you are getting into.  Would be interested in hearing that from someone with legal experience though.  That being said, I think the state is going to make the coal mines and oil companies play nice together.  Too much money at stake to let the coal mines control everything.

Permalink Reply by Philip Brutz on September 9, 2011 at 9:19am

This is from an ECLIPSE RESOURCES lease.

24. FORCE MAJEURE: When drilling, reworking, fracturing, stimulating, or other operations hereunder, or Lessee’s fulfillment of its obligations hereunder are prevented or delayed by such laws, rules, regulations or orders, or by inability to obtain or delay in obtaining for any reason any and all necessary permits (including, without limitation, an inability to obtain well permits as a result of objections of owners of coal rights), equipment, services, material, water, electricity, fuel, access or easements, or by fire, flood, adverse weather conditions, war, sabotage, rebellion, insurrection, riot, strike or labor disputes, or by inability to obtain a satisfactory market for production or failure of purchases or carriers to take or transport such production, or by any other cause not reasonably within Lessee’s control, including any periods of depressed natural gas pricing, this Lease shall not terminate because of such prevention or delay, and, at Lessee’s option, the period of such prevention or delay shall be added to the term hereof. Lessee shall not be liable for breach of any provisions or covenants of this Lease when drilling, production, or other operations are so prevented or delay.

Permalink Reply by SA Frank on September 9, 2011 at 9:32am

Need to give that consideration before you sign.  If it's spelled out in the lease, then it would be enforceable.  Anyone else have that in their lease?

 

 

Permalink Reply by Philip Brutz on September 9, 2011 at 9:46am

This is one of the many reasons that people should join landowner groups.  We joined KWGD.  If I was in Belmont I would join the Smith-Goshen Landowners group.

Permalink Reply by Mickgyver on September 9, 2011 at 11:18am

it would appear that if a person has deep coal rights and others around them dont a well could be set and drilled through the coal righted property to reach under the coal located on other property that cannot be drilled because of previous coal  leases in place

Permalink Reply by Philip Brutz on September 10, 2011 at 1:09am

You are right, they could drill through the property that still has the coal rights and go horizontal under the other properties. But I think that what we are watching right now is gas and oil companies scrambling to lock up as many leases as they can for future reserves. They will try to pool you with other landowners and then lock you in for years by ether “force majeure” or “held by production”.

Permalink Reply by Mickgyver on September 10, 2011 at 6:25pm

That could be true . the leases need some special revisions to avoid such problems . this new discovery will take years to develope all these properties.Has anyone seen any information on the difference in profit of wet gas versus the dry gas in Pa, and how closely the Utica really is to the barnett shale as far as recoverable products from a well .