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Friday, June 24, 2011

GAS LEASING: What's Wrong Here?

GAS LEASING: What's Wrong Here?
What's wrong can easily be identified in the types of leases the unwary public is still signing. A few years ago companies or their agents(landmen) came amongst us and offered money per acre for underground resources. What was in the public's view ... forestland and open fields, lakes and rivers, are all that concerned the majority. Money for the sub-surface? What a fine idea! ... especially in light of the area's economy.

How many folks concerned themselves with "how that sub-surface was to be accessed" more than they thought about the "new camper, nicer fishing boat, or that charge card that could be paid off." ?

In reality the situation is a Monday-morning quarterback "take" on what those early leases did for the rights holders.

1. Gave them much less money per acre than it was worth.

2. Provided a royalty percentage that was the state's minimum, or if higher had company costs subtracted from the owner's royalty payment BEFORE the final check was written.

3. Failed to specify the shale layers (Marcellus & Utica) the company was confined to drill in. (This in effect tied the "rights" up down to China.)

4.Gave unlimited access to the owner's land NOT ONLY for drilling, but also for the placement of telephone lines, electric power lines, pipelines for water and gas, building construction, plants, drips, , gates, meters, generators, compressor stations, transportaion roads for oil and gas and all other products whether taken from that property or a neighbor's. Use of water, oil and gas on the premises.

5. Included oft times was a lease expiration date that was made meaningless by fine print clauses in legal-ese that tied the land up till the sun no longer shines.

Print space prohibits further listing of all that exists in leases like this.

All of the above is history, or it was until a new wave of various company agents began making the rounds. Who do they target? ... Rights holders that turned them down on the first go-round ... Newly identified rights holders ... Rights holders who signed earlier leases that actually expire. What's different? Very little in terminolgy has changed, but the money offers HAVE gone up. Five dollar offers have gone as high as $2500 now, and if one is on the verge of bankruptcy ... leasing away the future and that of future family members may be the price that must be paid. At some later point if selling off the acreage to make ends meet (taxes go up don't they?) then having such an industry-friendly lease makes the land of little value.

In the past year an aggressive effort to perpetuate a lease that has been stated verbatim in the above paragraphs has reaped wonderful rewards for the company marketing it. Individuals believing the "stories of glory" this lease will bring them have signed ... signed away their chance for a fair deal ... signed away any control over they had of their own property. The little addendums the company agreed upon to make it a better-sounding lease were often no more than EPA and DEP regulations that would be followed anyways.

The seed this story plants is one of caution for the rights owning individual. To help level the scales of justice (fairness) when making the most of natural resources, it takes a collective effort by many to level the playing field. Smart leasing as a large group endeavor can make the development and production of natural gas in our region a positive experience for all.

Our gas-rich shales already have the "attention of the world". This article should have yours.

Janice L. Hancharick
126 N. 8th St.
Olean, NY 14760
2012 Mallard Ln.
Raleigh, NC 27609
E-mail: jlhanch@nc.rr.com
Phone: 919.876.2917


Anonymous said...

You are an authority on this because??????? Please list your credentials, education, degrees, majors, years of experience in all of the gas/oil, natural resources and anything that might make me think you really know what you are talking about.

Anonymous said...

boy janice you have a lot of haters out there...

Anonymous said...

Yeah... what 3:01 said. Bust out the credentials !

Edu Ma Kated said...

"Please list your credentials, education, degrees, majors, years of experience ..."

It don't take a rocket scientist to know that people will lie their asses off to make a buck.

Anonymous said...

Screw them Janice you warned them... your the one that will be laughing the last laugh! They know it all

Anonymous said...

Good job here Janice!!
You will find that the hecklers posting above and demanding your credentials know very little about anything other than someone wavied a dollar under their noise and they sold out everything including their brains for the money. Keep up the good work.

Anonymous said...

They should all be run out of the state. They are from Texas, with illegal Mexican workers. What do they care what they do to OUR land or OUR state. As long as they have the Governor in there pockets and are making LOTS and LOTS of money off of us. What will be left when they are done????

Anonymous said...

Ill be retired and have things, thats what they will leave, you tree hugging cry baby!!!


Anonymous said...

One item that was conspicuously absent from the list of "bewares" is the middle (wo)man who injects herself into middle of a process between somebody who actually owns something (mineral rights) and somebody who wants to buy them. Does that remind you of anyone?

Anonymous said...

10:58.... Dawg.. Most people that retire have things. That`s why they retired.

Anonymous said...

PA is so backwards anyway. How can someone own land but not whats in it. Farmers can work hard their whole life to leave something for their kids only to find out that they don't own their mineral rights and some guy basically stole them while he wasn't lookin'. I guess they can do it because the law makers are makin big bucks off it too.

Anonymous said...

to 10:58; you'll be retired and have many things, except for a brain.

Anonymous said...

The people with the brains left Potter or will leave soon.
It's going to be increasingly more difficult to sell your home and relocate as time goes on.

Who would buy a home in here now?
Potter is going to be an industrial zone.
Drilling has brought property values down near gas well sites and compressor stations.Drilling is bringing the value of homes down throughout Potter.

It's not going to look like this 5 years from now.
Everyone including perspective buyers are aware of this.
Thank you for doing your part Janice.

Anonymous said...

"Farmers can work hard their whole life to leave something for their kids only to find out that they don't own their mineral rights and some guy basically stole them while he wasn't lookin'."

OR ... The land is worth nothing because of all the contaminated ground from the mineral rights ownwers greed.

Anonymous said...


Anonymous said...

It`s grab the money and screw everyone !!! Thanks Janice :)