Replies to This Discussion

Permalink Reply by Al Cramblett on August 31, 2010 at 11:13am

Here's an ODNR web site that provides excellent info:

http://www.dnr.state.oh.us/mineral/landowner/tabid/17732/Default.aspx

Permalink Reply by Al Cramblett on September 1, 2010 at 3:42am

10% of the increase in up-front money that he is able to negotate above the owners best offer. Also, I understand you are affilated with a drilling company. May I ask the company's name?

Permalink Reply by Dan on February 20, 2011 at 4:40pm

MARK YOUR CALENDARS! First meeting of the Harrison County Ohio Landowners Group

This Thursday, February 24, 7:15pm at St. Teresa Church Activity Center in Cadiz.

This is a group by landowners for landowners with two main goals:

1. Protecting the natural resources of Harrison County with strong lease wording that guards our soil and water.
2. Boosting the economy of our county by getting the best lease compensation we can achieve for our landowners, thus keeping money circulating in the county.

Please visit www.harrisoncountyohiolandownersgroup.org more information on this brand new group! On the website you can see our lease document, the sign-up form, and learn more about how the group operates. There are no large signing bonus fees paid out to brokers or landmen in this group! It is organized by landowners of Harrison County for landowners of Harrison County. Please consider coming to the meeting Thursday, but even if you can't please contact us at info@hcolg.org or (866) 931-4197 (a free call for landowners residing out of the local area) for any questions you might have.

A little background: Many of you have seen my posts on this forum for quite a while now. Like most of you, I came here to educate myself about gas leasing and to network with other landowners. I am also in negotiations with landmen for my acreage. The research I have done over the past few months has led me to the conclusion that the best way to negotiate is directly with the gas companies, and the best position for negotiation is being a part of a landowner group. Some of the groups out there are "for-profit", where the attorneys or landmen organizing them keep 6%-10% of the signing bonus. In HCOLG, the we landowners run the group, and we keep all of our bonuses and royalties for ourselves. Plus we are negotiating some of the strongest lease terms that I have seen offered in this county. I have observed other counties starting up these kinds of grassroots groups, but no one was doing it in Harrison, so after talking with many others including folks on this forum and several county leaders, I decided to start our own group here. Go to www.hcolg.org for more information, and please spread the word about it to your neighbors. I hope to see you all on Thursday. Check the website for a map to St. Teresa Activity Center. It's a block down from Coffy's Supermarket.

-Dan Ellis

Permalink Reply by ray schmidt on February 21, 2011 at 4:30am

good for you dan, i am glad to see someone get a group started for harrison county. i belong to another group but i can tell you this is definatly the way to go. you will have more barganing power as a larger group. i read through your contract and i think you might be able to do a little better on some of the terms. whatever you do DONT let one of these lawyers scare you into using their services! they are asking a 6_8% of bonus!!! if you get 30,000 acres together that is a huge profit for them on something they do very little work on.there are some contracts you can look over online and make changes as to your needs.anyway good luck to you and your group hope you get a fair contract!!

Permalink Reply by Dan on February 22, 2011 at 3:35am

Thanks for spreading the word Katherine!  I'm getting some great response, and I think the meeting on Thursday will be very informative and helpful.

-Dan

Permalink Reply by Dan on February 22, 2011 at 3:33am

Thanks Ray,

I agree that the contract needs more work.  After talking with Dick Emens (who will be at the meeting Thursday) I am planning to address several more areas in it.  I want to get it to the point where it is a good launching point for negotiations.

-Dan

Permalink Reply by Poison Ivy on February 26, 2011 at 1:00pm

Yes, Harrison County Ohio Landowners Group or hcolg.org

FOR the people, BY the people of Harrison County Ohio

 

Permalink Reply by Dan on February 26, 2011 at 2:39pm

We had a very good showing at the first meeting of Harrison County Ohio Landowners Group on Thursday. 45 people attended, representing all parts of the county. Dick Emens gave a nice presentation on leases in Ohio and what to watch for. Anyone who wants to see his detailed slide show again or get a copy of his article on the unusual provisions found in the new gas leases can visit the HCOLG website and look under Latest News or also under Links.  We really appreciate attorney Emens supporting our group by sharing his 20 years of experience in the O&G industry. We had a very fruitful question and answer time.  

This meeting was a great start. Now we need to continue to spread the word. Look for an announcement soon about the next public meeting, and thanks again for all your support!

 

-Dan Ellis

  

Harrison County Ohio Landowners Group

"by landowners, for landowners"

www.hcolg.org

dellis@hcolg.org

(866) 931-4197

Permalink Reply by Poison Ivy on February 27, 2011 at 1:39pm

Awesome! You go , Girl!  :)

Permalink Reply by Al Cramblett on February 28, 2011 at 7:41am

Katherine,

 

Thanks for your recent post and the links to information regarding franking and water quality. I agree with you that this is an issue that needs to be addressed anytime we disturb the surface or subsurface. The federal government has and continues to use deep well injection as a method of disposing of dangerous chemicals. As an engineer, I believe that technology exists to make this process safe. Unfortunately, some companies do not follow these procedures which can result in catastrophic results.  The impact upon some families has been horrible.  To me, the solution is to obtain an independent chemical baseline of one’s water supply before any activity such as oil and gas drilling is permitted.  If a problem develops, any jury would hold the companies involved liable, and you have your baseline as proof that changes occurred.

 

Al

Permalink Reply by Nate on February 28, 2011 at 7:36am

The govt always gets theirs. As many times as they can!

Permalink Reply by Dan on March 2, 2011 at 6:10am

The taxing issue is worth following.  There is severence tax, ad valorem property tax, income tax, and local impact tax. I'll say a bit about each one.  Anyone with more knowledge please comment.

 

Income taxes: Revenues will go up for local, state, and federal goverments as people start to receive signing bonuses and royalty checks.  A tax accountant should be able to give some good advice to the landowner about how to minimize income taxes, and also about when and tax payments should be sent in for those of us who might not be used to paying taxes any time except right before April 15th.  This is not a new tax of course, just possibly a new tax bracket and maybe an audible cry of agony at having to fork over to Uncle Sam such a large of chunk of the signing bonus check you just received. On the receiving end, governments should hopefully be able to balance their budgets finally.

Severance tax: The gas companies get charged this tax based on the amount of gas produced by a particular well (“severed” from the land) on a drilling unit.  Depending on the lease wording, the gas company may pass on some or all of this tax to the landowner, subtracting it from the royalty payment.  Ohio’s severance tax on gas and oil is fairly low compared with other states and is solely meant to fund regulatory activity in that industry like hiring more inspectors.

Ad valorem property tax: This is sometimes used interchangeably with severance tax, but counties and municipalities can levy their own tax on severed minerals. Depending on the lease wording, the gas company may pass on some or all of this tax to the landowner, subtracting it from the royalty payment. These collected taxes can be earmarked or go into general funds.

Local impact tax:  This is just a more specific name for a severance tax levied by a county or municipality for the specific purpose of paying for things related to the drilling like road maintenance, environmental monitoring, inspectors, etc.

For a landowner, all of these taxes can be precluded with this clause in your lease:

 

Lessee shall pay all Ad Valorem taxes or assessment of Lease Products or Lease Product reserves made by any local, state or federal entity or governmental unit attributable to, or resulting from the assessment of Lease Products from the Leased Premises regardless of the percentage of royalty paid to Lessor. Lessee shall, in addition, pay any and all severance taxes or other excise taxes arising out of or relating to this Lease and/or the Lease Products.

-Dan

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