Comment

Comment by Brad on January 2, 2012 at 2:28pm

At least the ALOV/Buckeye lease has some type of protection in that a company cannot simply drill a shallow well land in order to "tie up" land - they have to at least apply for a permit to drill a deep well. Every permit expires - how long does an operator have to commence operations before the permit expires?  This is a protection that many leases do not have - does Wishgard have this protection?  Also, a shallow, vertical well (ie Clinton) will not cover all 640 acres in a unit - it might only cover 40 acres.  Therefore there is no need for the land owners of the remaining 600 acres to make a written demand because they are not receiving paying quantities via the shallow well......hence the lease expires for them.  It is obvious that some feel very threatened by the ALOV/Buckeye lease and will do whatever it takes to degrade it, even if it requires sophistry.  From my research I've discovered Bob Rea is a normal guy (a farmer like many on this form) who created a thorough, well written lease (with the help prominent legal counsel) and many in the industry are not happy about that.  They "strain at a gnat and swallow a camel" in order to reduce his effect in an effort to advance their own agenda.  I believe the people on this form are sensible people and will figure this out for themselves.

Comment by Ed Ganelli on January 2, 2012 at 1:32pm

There are still FAR more landowner benefits in an ALOV style lease than there is in the WishGard lease, everyone.  The WishGard lease is the basic, O & G friendly, starting-point lease.  Remember, in the WishGard lease, you SIGN AWAY all rights to have the lease terminated under failure to fulfill implied covenants, and also sign away your right to have disputes heard on a LEGAL basis...

Before signing with WishGard, ask the agent to tell you, as a landowner, just ONE reason to sign now with Wishgard.  Nowhere in these forums so far has any WishGard agent stated what benefit will be gained by signing NOW with WishGard instead of waiting a while to see what happens in the area shortly...

Comment by Adam Thomas on January 2, 2012 at 10:22am

Finnbear,

    I am not sure which version I have.  I have seen two of them.  They are both about 16-17 pages.  They both look real nice till you actually read them.  They are filled with window dressing!!  It is full of loopholes.  The PUGH clause loophole I talked about earlier as well as the Force Majeure Clause that allows them to extend the lease "by reason of inability to obtain or to use equipment or Material or by operation of Force Majeure" So as long as their equipment is tied up elsewhere they can extend the lease.  This lease is rediculous.  I heard so many people that are not in the industry talk so highly of it because they do not fully understand these terms so they do not know what to look for. However, if you understand the industry then when  you read it, you quickly realize that it is nowhere near how it is represented!  They must do a great sales job!!!!

Comment by Bill Simpson on January 2, 2012 at 8:39am

I have read many posts on royalty percentages and up front payments for signing. Is there anyone out they who can say what they are receiving approximately per month for Trumbal/Mahoning county royalties?

I would like to compare the geographical areas.

Comment by shantycreekfarms on January 1, 2012 at 2:09pm

Boy it gets more confusing every day!!!!!

Comment by Adam Thomas on January 1, 2012 at 7:36am

There is a loophole in that if they drill a shallow well then shut it in, at the end of the primary term, the lessor must notify the lessee that they are to commence with development of deeper depths. It then says that the lessee has 180 days to commence with said development at least to the extent of applying for a permit. Once they apply for the permit, they fulfill the contractual obligation and hold that acreage.
Why else would CHK keep leasing ground that they can't horizontally drill in the next 8-10 years? They can't if the pugh clauses are tight. Most people read the beginning of the clause and don't follow it because it is confusing.
I am sure that this is the reason that ALOV and Buckeye will not show leases they have actually signed. 99% of the people are not versed in this stuff well enough to catch these things (including alot of the local attorneys). That is why they have the masses vote on their leases with majority rules. Most people get blinded by up-front money and don't realize that the lease is the most important of all because without the proper wording than you will not see the royalties and that is where the huge money is!!!

Comment by Finnbear on January 1, 2012 at 7:13am

Which version of the ALOV lease are you referring to?

Comment by Adam Thomas on January 1, 2012 at 5:14am

Check the Pugh clause!!!

Comment by Bill Simpson on January 1, 2012 at 4:42am

If and when royalties should come to a land owner is best to have an LLC type of setup or just have the monies sent directly to the owner. I was told that it may be a good thing to put the lease into an LLC setup both for protection and tax purposes. Is there anyone out there who has done this or has some suggestions. My wife and I are at early retirement age and would lose our social security if we have checks made out to ourselves. I would appreciate any and all information if anyone has done this or thought about it.

Comment by Finnbear on December 31, 2011 at 7:36pm

The Force Majeure clause is included in almost every Paid-Up Oil and Gas lease today. It covers the O&G Co. when circumstances beyond their control prevent them from moving forward with operations. Most of the ALOV lease language has been incorpotated in the landowner group leases that have been signed in SE OH since ALOV signed their first group earlier in 2011. What about the ALOV lease do you believe is unacceptable?

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