Replies to This Discussion

Permalink Reply by KG on October 13, 2011 at 9:48am

We are included in a unit already. I know it is for oil/gas/mineral rights.

Permalink Reply by KG on October 13, 2011 at 9:56am

Thanks Josie, this is very strange. No bonus money, no chance to negotiate . . I feel trapped and cheated. Maybe it is time to seek a lawyer!

Permalink Reply by KG on October 13, 2011 at 10:16am

100 acres and 60 are included in the unit.

Permalink Reply by KG on October 13, 2011 at 10:18am

I know that somehow they added pipelines (?) just before the lease was going to expire, and they were able to somehow lock us into extending the lease without a re-negotiation this way.

Permalink Reply by KG on October 13, 2011 at 2:32pm

Thank you Josie for the advice. I will be contacting . .

Permalink Reply by Lynn Wigglesworth on October 13, 2011 at 11:02am

Were you put in the unit  before or after your primary lease expired? I thought most older East leases had the automatic extension clause in them; I know the 2009 version does?

Permalink Reply by KG on October 13, 2011 at 2:32pm

I believe it was after..

Permalink Reply by Brian Day on October 13, 2011 at 12:43pm

I would bet that it says in your lease that you could have opted , by certified mail, to notify East ninety days before the lease expired that you wanted out.  If you did nottknow about that clause, they weren't going to notify you.  If they drilled a well and put part ofyour land into a unit before the first five years expired, they claim to hold your lease idefinitely under "held by production" even though no gas is flowing out and no royalties are flowing in to you.  I have heard rumors of some people challenging the definition of "held by production"legally but that kettle of fish has not come to a boil yet.  I suspect East/Shell owes you the first year, re up fee of $50 or $60 bucks an acre because they paid me that amount in the last few months when i went through the same situation that you are experiencing.  Welcome to the Shafted By East Club.

Permalink Reply by KG on October 13, 2011 at 2:35pm

"Held by production" sounds very, very familiar... there is no well yet, but I'm thinking that East automatically extended our lease, without our approval, simply because they "broke ground" to begin installing pipelines just before the lease was due to expire. Definitely in the "shafted by East/Shell" club - unbelievable how they can do this to people. Can't wait to receive the $5 an acre bonus funds!

Permalink Reply by Finnbear on October 13, 2011 at 2:40pm

You let them put pipelines in on a drilling lease? A pipeline right of way should always be negotiated in a separate contract. The only pipe they should be able to put in the ground is one that carries gas from your property to the transmission line.

Permalink Reply by KG on October 13, 2011 at 3:04pm

Yes, that is the pipe I meant when they broke ground. It is not on our land. It is on other land that is included in the unit. They did want to run pipe through our property, but we declined.

Permalink Reply by Brian V. on October 13, 2011 at 1:52pm

When was the end of the five year primary term and when was the declaration of unitization dated. If they filed after the 5 year primary term had expired and you have no extension then you may have a claim. That is if no other operations such as seismic or pipeline work had begun. If they filed the declaration before your lease expired then they are only obligated to pay you rentals not a bonus payment every 5 years. They consider you to be in the secondary term which will last the life of the well and/or any subsequent wells. The good thing is your in a unit. The other good thing is you don't have to get jerked around again in lease negotiations with Shell.

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