Replies to This Discussion

Permalink Reply by wyalusing jim on April 12, 2013 at 9:57am

actually it depends on the lease terms as to whether the burden (if any) for filing the surrender lay with lessee or lessor. some leases state that the lessee must file the document within a specific period of time without notice from lessor.

and if you are unable for some reason to get a surrender from your lessee, you can file an affidavit of non production and automatic termination with the recorder in towanda yourself. the document simply certifies that the terms under which your lease could have been extended were not timely met and that under the terms, the lease has expired. that flags any landman searching your title to pull your original lease and verify that the lease has expired.

wj

Permalink Reply by G S Gass on April 13, 2013 at 1:56am

WJ,

Good points and thanks for laying out next steps!  I like the lease clauses that require Lessee to file a surrender at expiration of primary term.  If the Lessee does NOT surrender the lease, then my advice is to send the request for surrender, wait 30 days for a response, then file the affidavit of nondevelopment.

Unfortunately, there are operators which have delayed or ignored surrender requests, and this reflects poorly on the industry.

GG

Permalink Reply by wyalusing jim on April 13, 2013 at 3:13am

agreed, but they are kinda busy right now.

and...surrender or no, affidavit or no, an expired lease is still expired. the courthouse paperwork is merely a formality and notice to possible future lesses that you're available.

most times, if they want you, they'll come lookin'.

wj

Permalink Reply by Wayne Miller on April 13, 2013 at 9:10am

 Way back in aught 5, when we were signning with East Resources, a lot of people had expired Appalachia leases which were never taken off the books, East was able to get a "blanket" release.

 Also then we were told that if the leasing company was in arrears paying the annual rental that you had to send them a registered letter advising them of that and they had 60 days to rectify the situation.

 Maybe with a lease actually expired or a lease where to rental was paid upfront it would be different, but I'm not sure I would be too hasty in alerting  them to the expiration.

Permalink Reply by wyalusing jim on April 13, 2013 at 9:39am

actually though, a delay rental lease is still in force until the expiration date unless there is an automatic forfeiture clause for non payment. usually if they dont pay there is wording that you have to notify them of a breach of lease and give them a defined period of time to rectify the situation.

those old central appalachian petroleum leases have fascinated me since i first saw one. there was a company that fell into a gold mine, probably by pure luck. they had hundreds of leases around me, but never paid the bonus.

had they made the small investment back then and paid them up, they would have made tens of millions flipping them when the gasicane hit.

just goes to show ya, gas companies aint as shrewd as we sometimes give them credit for.

wj

Permalink Reply by G S Gass on April 13, 2013 at 1:22pm

Jim and Wayne,

Good observations!  I evaluated acreage submittals from CAP and other speculators on several geological structures in the 80s and 90s.  CAP acquired substantial leasehold positions, usually for $0 for the first 90/180/365 days, then $1 or $2/acre delay rentals which gave them time to flip the acreage.  Unfortunately for Lessors, they recorded the leases, and if they were not successful flipping the leases, they did NOT surrender the leases.  This created an encumbrance or title defect on the OGM title which needed to be resolved.  Fast forward to 2008 - Landowners signed on with landowner groups and leased their property for very attractive terms, only to have a bonus payment delayed due to the defected OGM title encumbered by the old lease.   So - if the lease is expired, request a surrender.  It will save time and expense during future lease opportunities.

Permalink Reply by Tug Steward on April 16, 2013 at 3:46pm

Jim - would you have a copy of this affidavit to share?  I sent a friend to the courthouse to have this very action take place on his South Creek Twp property and he was essentially turned away without any satisfaction or indication it was even possible.

Permalink Reply by wyalusing jim on April 17, 2013 at 2:00am

no tug, i dont have a copy of one, i've never needed to file one.

the affidavit is just a sworn statement that there has been no development  or production from a piece of land that was under lease. the recorders office doesnt provide legal advice or forms, they just record what they are given, they are also not responsible for the accuracy of anything they record. it's just a records office.

the forms can be found on the internet like here:

http://sbaustinlaw.com/library-papers/Stahl%20-%20Key%20Title%20and...

on pages 17 &18. of course you'd modify it for pennsylvania.

pennsylvania, and particularly bradford county is new to these issues, it may take some time for them to get up to speed on these things.

wj

Permalink Reply by Mike C. on April 17, 2013 at 2:36am

They are also all over Landex.  You would have to create your own form but the template can be simply obtained there.