Replies to This Discussion

Permalink Reply by AT on November 17, 2011 at 5:51pm

Finnbear, I'm sure their deed probably does indicate the reservation. I don't believe the Club is taking any issue or trying to stake any claim on any royalties from the oil and gas. They know the underlying oil and gas is not theirs. The issue is what IS theirs and the protection of it, which is the surface. I believe the Club’s position is that 2 parties, North American Coal Royalty Company and CHK, negotiated a lease contract involving surface terms and protections on land surface, that neither NACRC nor CHK own, which is owned by the Club.

 

Again, I think it all comes down to the specific language in the deed where the reservation was made over 50 years ago, which we do not know at this point. I am not an attorney, but as I mentioned in a prior post, it would be interesting to know whether or not the mineral rights owner in this situation expressed the right to "ingress and egress" or the "right to extract said gas & oil" in the reservation of the oil and gas rights when they were severed. If this language, or similar language, was expressed in the reservation on the deed, I don't think the Club has a leg to stand on today. If this language, or similar language, was NOT expressed in the reservation on the deed, and NACRC and CHK are relying on this right to be implied, I believe the Club can make a case in front of a Judge.

Permalink Reply by AT on November 17, 2011 at 6:16pm

The argument is that the lease did not exist when the Club purchased the surface rights over 50 years ago, therefore, CHK should have to negotiate the surface terms and protections with the current surface owner, which is the Club, and not NACRC. Had the lease existed when the Club purchased the surface rights over 50 years ago, which it didn't, then the Club should be bound by the terms of the lease.

Permalink Reply by Dan on November 17, 2011 at 10:14am

I would imagine that all that land was bought up whole and owned by NACRC (North American Coal Royalty Company), and then later after several years of strip mining they did what every land seller in Harrison is probably going to be doing from now on - they sold off the surface and reserved the minerals for themselves.  People like Kenneth Buell and Jewett Sportsmans didn't think much about it at the time, but I guess there is a lesson there for us all.

 

Permalink Reply by Paul Martinelli on November 17, 2011 at 10:24am

Funny thing is.....some of the coal companies recently was trying to sell stripped/reclaimed land ( 10 years ago) on the cheap....and couldn't find buyers.

 

Boy have things changed.

 

I have stripped land, in Tusc. county,.....must have been back in the 30s...mineral rights have been retained.

 

Permalink Reply by AT on November 17, 2011 at 10:37am

Dan, Exactly. We're in the process of selling some property now. We're leased and will be reserving the mineral and oil & gas rights. Furthermore, how would one even go about putting a price on real estate/land today with the oil & gas rights included? Who is going to pay a price based on speculation of potential future royalties and what lender is going to finance that kind of asking/selling price that is based on speculation?

Permalink Reply by BMR on November 18, 2011 at 5:16am

That's usually the case.  Sometimes the land was sold for $1-$10 an acre or even donated by the coal company.

 

AT- What good would it be to reserve minerals if you aren't given the right to obtain them?

Permalink Reply by Dan on November 18, 2011 at 5:44am

BMR,

Directional drilling is the game-changer with regard to obtaining minerals.  It seems very possible now that during a real estate sale one could reserve the minerals while placing a no-surface damage restriction in the deed for the benefit of the new surface owner.  This could be a real selling point for buyers wary of buying a piece of ground that could get a pad put on it.  This kind of restriction in the deed could give a surface buyer piece of mind, and with the minerals still easily accessible by a horizontal lateral, I don't see the mineral value dropping much, if any.

Permalink Reply by Dan on November 18, 2011 at 5:53am

...and that's really more of an issue for just the next decade.  By then  the drill pads would be in and the pipelines run, so surface land could be sold severed from the minerals without people wondering if a pad might show up.

Permalink Reply by BMR on November 18, 2011 at 6:24am

Dan,

 

In regards to the Sportsman Club who may own thousands of acres and NAC might own the mineral interest to all of it.  How would you produce your minerals then?  I understand what you're saying and I've seen it many times where one reserves the minerals with no surface rights.  As much as it pains me to say it, I don't think CHK is out of line THIS TIME. haha

Permalink Reply by Dan on November 19, 2011 at 4:33pm

I agree BMR that if the property is thousands of acres then if you have a no drill restriction on the whole thing then the minerals could become inaccessible.  It would have the same effect if it was a smaller parcel but was surrounding by parcels with no drill restrictions.  However, the restriction doesn't mean they can't drill; it just means that the gas company has to deal with the surface owner and make a separate agreement with them if they really want to get on the surface to drill for the gas.

 

By the way, in the case we're talking about, the Sportmans Club only owns around 200 acres, but NOCRC owns the mineral rights under them and just about everyone around them, totaling thousands of acres, so it is still kind of puzzling why they can't drill somewhere else.

Permalink Reply by AT on November 17, 2011 at 9:28am

Katherine, By the way, the Girl Scouts don't welcome male members either, however, I still support them and even buy their cookies.

Permalink Reply by Philip Brutz on November 15, 2011 at 7:53am

It seems like they go for hill tops and valley floors.  Easier to put the pad in. 

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