Replies to This Discussion

Permalink Reply by Steven R. Rothenberger on April 12, 2013 at 9:04am

I had my leases extended by Penn Va. with a provision that they pay me a $5 a year per acre "Rental" payment, well in the second year of the extension (Feb. 13) when i notified them that they had not paid me they informed me that they were not going to pay me either as they were pulling out of the Potter Co. area, at which i said i wanted a release of lease and termination recorded which they agreed to.  I was wondering how they were going to do this as my lease was never recorded in the Recorders office.  Well they soon called me and said we can't record a release because the recorder sent it back to us because there was no lease on record so i had them send me a letter stating that they were not paying according to the terms of the lease and that the lease had therefore terminated.  I was not satisfied with that and asked that they send me a Release of Oil and Gas Lease, do you think this is sufficient?

Realtor Joe

Permalink Reply by G S Gass on April 13, 2013 at 1:49pm

Joe, Interesting - I would feel most comfortable if Penn Virginia provided you with a Surrender of Lease document - possibly the document which Potter County Recorder refused to record. 

You could prepare and record an affidavit of nondevelopment and nonpayment of rental.

However, if the lease was not recorded, your OGM title is not encumbered. 

Be sure to keep a copy of all correspondence for future title curative work.

Permalink Reply by Steven R. Rothenberger on April 14, 2013 at 3:24am

I have all correspondence including the envelopes they came in.  Thanks for your input.

Joe

Permalink Reply by Janice L. Hancharick on April 17, 2013 at 4:06am

Gentlemen:  You have brought up a subject that many in our region were unaware of ... the Letter of Surrender.  Although it has been mentioned before on other sites and media, info like that needs to be out there often.  Thank you.

If possible, please attend the 4-County meeting this coming Tues. 6:30 PM @ the St. Eualalia Parrish Center, 6 Maple St. in Coudersport  APR. 23rd.  Besides reporting on the Pittsburgh NAPE  results for our counties,  time focused on "Back to Basics: O&G Leasing 101".  Questions raised are ones you are obviously capable of addressing.  Group actions = team action ... including Q & A sessions.  Hope to see you!

Permalink Reply by G S Gass on April 17, 2013 at 6:54am

Janice, You probably are aware, but for the benefit of others:

Back in the day - Exploration companies would file a "blanket surrender" which listed all leases in a county to be surrendered.  Currently, the Recorders of Deeds require a separate surrender document for each lease.  So, the amount of paperwork for each lease surrender and the separate recording fee for each surrender has dropped the lease surrenders way down on the lease administration department priority list, and it usually does not happen unless the Lessor makes a request.  Unfortunately, it is important and expired leases need to be surrendered in a timely manner.

Best, Greg

Permalink Reply by Janice L. Hancharick on May 1, 2013 at 4:20am

You're absolutely correct that a Letter of Surrender is needed, but your form has a couple glitches.  Can the tracking number be written in after one has rec'd a receipt for a certified letter? 

I would suggest never including the words "At your earliest convenience" in a request document.  30 day notice was stated above ,,, keep it in the paragraph below.

Paper trails are needed ... for now and for the future.  Keep a copy of everything before sending paperwork out.

As a certified professional landman I'm sure you know all this already.  We all slip up sometime.  Thought these suggestions would help.

Permalink Reply by G S Gass on May 1, 2013 at 4:50am

Janice, Good points.  I have a supply of certified mailing labels, return receipts and forms on hand so I insert the article/tracking number [as shown on the certified mail label (eg. 1234 5678 9012 3456 7890)] directly from the label while drafting the request letter - in advance of going to the post office.  Earliest convenience comment is duly noted and appreciated.

Permalink Reply by Tim on May 9, 2013 at 4:29pm

Why are co's pulling out of potter?

Permalink Reply by Jack Young on May 10, 2013 at 4:21am

Bad drilling results - there hasn't been a single profitable shale well drilled in Potter County yet. It's been a write-off for everyone so far. We need a good well to bring them back.

Permalink Reply by Jack Young on May 12, 2013 at 12:23pm

If the price was $10/mcf then some of the wells might be profitable, but we're likely to see prices stay below half that level for the next 25 to 30 years due to the enormous reserves of shale gas that have been discovered nationally. For some reason the thickness of the Marcellus in Potter County turned out to be less than expected, and the quality of the shale wasn't as good either. That plus the price of natural gas is what's scared everybody away.

 

Permalink Reply by Tim on May 13, 2013 at 2:33am

Jack,

Are the wells horizontal?  Is the pressure low?  Can you give me any more details or send me a few links that I can read up on.  It seems there is more than sufficient pipeline in the county to link into, so that does not seem to be an issue.  Are there big players in the county?

thx,

Tim

Permalink Reply by Jack Young on May 13, 2013 at 7:33am

Almost all the wells are horizontal. The Marcellus just hasn't proven to be very good in the county. Look up the productions reports the DEP has on-line. There's no solution in sight unless technology improves or some undrilled part of the county is a little better. Each producing area competes with other producing areas - if Potter County isn't as good as the alternatives (as it's shown itself to be so far) people will drill elsewhere.

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