*Approximation- 35 million can be gained from working in joint ventures, more than when the same number of property owners deal with landsmen individually.
*Drilling and leasing speculative – a hit only 50% of the time.
*Any consultant will only strike a deal as good as we give them. One got the summer of ’07 people, a whopping $165.00 an acre. It does not seem to me that there was given particularly good advice in terms of what they might get. The consultant took what they were willing to accept and ran with it. All the consultant did was shepherd. The sheep followed the lead and it took them to less than they might have received. The same might be said of working with an attorney which, is I believe what one of our members said in the first place.
*Properties in a unit will get the percentage of royalties that their acreage allows. Up front money simply gives the drilling companies the right to come on your property. On your property they can do what they darn well please under the parameters of the lease. If we have one hundred acres and our neighbor has four hundred and they find gas on our property, we still only get 1/5 of the royalty.
*Who pays for the added damage to Township or Boro Roads? We have had that problem with quarry trucks and are able to work that out as the quarry owners in general, live here. The gas company does not. Do the municipalities have a legal voice here? If the municipal roads are damaged, we may have to pay more municipal tax.
*Insurance: Be certain that the property owner understands the insurance of the company. It might be a wise plan to up your homeowners in case someone wanders in to look at the drilling process and breaks a leg in a woodchuck hole. Not sure what the gas company’s insurance covers.
*Make payment schedules very clear.
*Take the lease to a copier and raise the magnification so you can read every bit of the fine print.
*The chances of the lease being sold or transferred is high so make certain you know the terms of these actions.
*Have a third party take a sample of your water at least three months before action on your property.
*It takes 5-6 million to drill one well. Gas companies will get 87% of any gas.
*Protect your intended land use. Make sure your lease excludes surface use.
*DEP has only three offices in the whole state for Gas and Oil oversight. (Likewise, our County’s E&S staff is not large) If there was concern that the quarry operators had little oversight the same is true here. DEP only oversees production. Anything beyond that is a civil matter. Your problem. They could care less about your lease. Storm water Management plans must be drawn up for over 5 acres of disturbed ground. We must check on the Clean and Green provisions of the County. Now, new Commissioners so check on their views.
If any structures or outbuildings application must be made to
*This has the same potential to scour the land as a quarry. Again, watch the lease and make strong provisions to reclaim the land on and beyond what the Commonwealth might find acceptable.
*No gas storage on a property. It has the potential to injure the land permanently.
*A local person to have oversight of the process once the land has been disturbed; that the company is sticking to the lease. (Perhaps Farm Bureau can clarify that. I heard the term Ag. Inspector? On the 22nd.)
*We need a list of Industry Definitions
*The companies have the technology to place pipelines under a stream bed.
*You can designate the strata you want to lease. Near the surface is best.
*It would be better for the property owner to do a quiet title search. If someone else has signed a lease before you owned the property the company will deal directly with them and leave you out. (For new owners) Again, your attorney can answer any questions about Warranty of Title
*Clarify – The best lease is for 5 years. Ten is too long. They will know shortly after they come to the property if it is valuable to them. If they strike gas then they will be there until the gas runs out. Pipelines are forever so be careful how they are built and put a lot of protection into the lease. Make certain that if there is an extension clause in the lease that you are paid accordingly, not a simple $1.00 a year. That has happened. Sign a five year lease with the provision that if they do not drill in five years the lease is void and must be renegotiated.
This is a wildcat area. The companies are taking a chance: educated guess.
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