Did anyone refuse to sign a gas/oil lease?

Have you heard of anyone absolutely refusing to sign a gas/oil lease? If so, what was the the end result? Did the gas company win out? Trust me, putting the money aside, I'm sure there are many who would do things differently now compared to just a few years ago. I would have been ever so tempted to just tell them to pass me by and I'm being totally serious. Sometimes you have to go with your principles and don't let the money control things.

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Permalink Reply by Zack Jameson on April 8, 2015 at 4:06pm

I witnessed first hand the practices used by the gas and pipeline landman. The whole process turns your stomach. My advice is to contact an experienced attorney and let them handle it all. 

Permalink Reply by wyalusing jim on April 8, 2015 at 5:02pm

near me there are many folks who decided to not sign. the results are all the same, millions of dollars lost to them, and wells are being drilled around them, so everything lost and nothing gained.

it's everyones decision to make for themselves, and their loss does result in higher royalties for their neighbors.

wj

Permalink Reply by INVICTUS on April 8, 2015 at 5:37pm

Its a very mixed bag.

The money is staggering, and you learn to dance with the devil. For the rest of your life.

Your partner is a bit crazy, definitely obnoxious.

Treat it like a business.

You'll sleep better.

Permalink Reply by Gary L on April 8, 2015 at 9:14pm
Permalink Reply by Elnathan Cory on April 8, 2015 at 9:39pm

I refused to sign a pipeline agreement for over $100,000.

Permalink Reply by Zack Jameson on April 9, 2015 at 10:50am

Just to add this to the mix, I spoke with a few elderly folks who signed pipeline agreements but did not use attorneys. The agreement was all in the companies favor. The landowners got paid for only one line in the row regardless if multiple lines are put in. They were paid nothing for access. These landman know they are ripping off people instead of being fair, but it's condoned. The bad part is that the companies reward such tactics.

Permalink Reply by cecily cox on April 10, 2015 at 2:20pm

The oil companies will force unitize if they have to, but they usually will keep throwing more money at you. They may just go around you, it all depends on where your property is and if they need you for a unit.

Permalink Reply by Gas Boy on April 15, 2015 at 3:21pm

Wow..............you're a genius!

Permalink Reply by Donna on April 15, 2015 at 1:21pm

I know four situations, all in different areas.

One - Washington County, Hickory Twp., small 2-acre parcel.  He refused to sign.  The unit surrounds him; everyone's getting royalties, he earns nothing.

Two - Washington County, Robinson Twp. - larger parcel, around 30 acres, wanted really big bonus money and some addenda that nobody else was receiving.  Offer withdrawn.  Everything around him is leased.  Not in a unit, but no additional offers have been forthcoming for him.

Three - Butler County, not sure of the twp. - siblings inherited small parcel, a couple of acres.  Could not agree on anything.  Offer withdrawn, no unit as of yet, not sure what will happen if things pick up in their area.

Four - Washington County, Mt. Pleasant Twp. - 10-acre parcel, refused to sign, everyone in the unit earning royalties, he receives nothing.

Permalink Reply by Scott T. on April 15, 2015 at 2:10pm

I know of several people who refused to sign leases and were forced pooled by the ODNR in Noble County.  In the forced pooling order, the ODNR established the money/payment provisions to the non-signing landowners.   Drilling is now ongoing at the location.

It works like this:  Each forced-in mineral owner will receive a 1/8 royalty interest (12.5%), which commences upon production, and a 7/8 net production revenue interest that begins to pay out after the operator recovers 200% of the cost of drilling and operation for the first well and 150% of the costs of subsequent wells.

This topic was outlined and argued on a previous forced pooling thread last year on this site and I stated and I believe, if the well is productive, that it would be better to be forced pooled than to sign a lease.  The forced in landowner (the people who would not sign a lease) do not get the signing bonus and they only get 12.5% royalties vs. 20%,  but they have potential to get 87,5% of the production revenue once the wells are paid off as noted above.

Bottom line, refusing to sign may not ultimately be a bad thing from a monetary perspective in my opinion. 

Permalink Reply by Paul Martinelli on April 15, 2015 at 4:33pm

So....if you are forced pooled....after the wells are paid off, can you still be ripped of by the driller deducting processing/gathering....etc  fees?

Permalink Reply by Scott T. on April 15, 2015 at 4:43pm

Not sure Paul.  I am told that they are not allowed to deduct anything if you are forced pooled either prior to and after the wells are paid off.  Remember the ODNR sets the payment provisions of the order not the oil and gas company.

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