5/21/2008 UPDATE
BELOW IS THE FIRST ENTRY THIS WRITER MADE CONCERNING GAS LEASING AND GAS WELLS IN THE AREA. IT WAS WRITTEN ON JANUARY 10, 2008. AT THE TIME, I WAS AS NAIVE AS ANYONE ELSE HERE AND THOUGHT I DIDN’T OWN ENOUGH LAND (I THOUGHT THEY WANTED AT LEAST 50+ ACRES) AT THE TIME. WOW, WAS I WRONG. PLEASE READ THIS FIRST, BUT DON’T STOP. IF YOU SEARCH THE “GAS WELLS” CATEGORIES ON THE RIGHT SIDE OF THE PAGE YOU WILL SEE NUMEROUS ENTRIES AND RESPONSES. THE CURRENT SERIES IS CALLED “GAS MUSE” WITH THE CURRENT DATE FOLLOWING. SO MUCH MORE INFORMATION IS AVAILABLE IF YOU CHOOSE TO AVAIL YOURSELF OF IT.
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This is a subject which has become very actively discussed in various parts of the county over the past year. Your writer has not participated in the current lease scheme. As far as I know from the various companys’ positions, I do not meet the minimum acreage requirement. Further, not being well versed in the subject, will lead to either you the reader/writer to drive the commentary - or not.
One thing remains in my recollection about oil and gas leases from about 25 years ago. At the time there was at least one company buying leases. There may have been others. At the time people were offered a small sum to lease their land. At the time, farming was on the decline in a big way. A lot of good people signed up. Generally, the amount paid, was roughly equal to the real estate taxes.
The first year was generally paid up front. I believe the second year was paid on time. After that - nothing. The company had defaulted on the lease. This should be the end of that story; but just wait my friends.
Apparently there was something strange about these leases. Maybe they had automatic renewals or maybe it was something else. But there was something. A couple of years ago, an acquaintance tried to sell a property which had a gas lease from the early ’80’s. When a title search was done, the lease still showed up. The owner’s attorney had a difficult time getting a release. In fact the owner almost lost his sale because it took so long to find the company.
It has been said that there are owners who are getting as much as $750 per acre to lease their land for 5 years, which works out to $150 per year. Also, a royalty is to be paid if successful drilling occurs. If this is correct, that is interesting. It wasn’t that many years ago when you could buy larger tracts for not much more than that.
Again, having not spoken with anyone who had properly reviewed a current lease and not being involved personally, I have little knowledge of the subject. The future of this discussion is left up to you.
Hope some of you attended the gas and oil lease at Montrose High School last night. The attorney was a very knowledgeable man and shared a ton of info on this subject. What we need now is to organize the entire area and negotiate these leases as a group. The gas companies are offering only the minimun set by the state. Also Pennsylvania is alone in not protecting the taxpayers in the arena. We need to pressure the state reps to change the laws to protect us and not the gas companies.
There are two meetings scheduled from Penn State on this. Does anyone know where in Lehman the meeting of Januray 28 2008 will be held?
That’s about right with the old oil and gas leases from the 60’s, 70’s and 80’s. Many of them were never intended to be anything but a tax break for whatever o & g company ended up with them - they were sold and resold many times, with no intention of anyone ever actually drilling. The problem was that many of them provided that the company could extend the term pretty much indefinitely by merely commencing a well or paying a successive years’ rental or doing other things, and years later it was near impossible to prove the company hadn’t done so and extended the lease. Of course the companies were either out of business or had merged or been acquired and it was difficult to find them. So the lease could potentially still be open and active and thus it was a cloud on the title. There are ways in which the current o & g leases can be modified to protect against these and other “beartraps” and the companies seem open to accomodating the landowner if requested. Remember, they’ve already drilled and found gas here in the county, so everything’s negotiable.
I am noticing that many readers are going to this page. Please note the other entries under the “Gas Wells” category available on the home page. If you just read this page and nothing else, you will be missing important information regarding leasing, the information that last October, the House Oversight Committee held hearings on using chemicals (including diesel fuel) in the fracing process, injection wells that Chesapeake is or will be using to inject industrial waste down wells on leased property, as well as many other itemssuch as radon and hydrogen sulfide.
Please be informed before you commit your property (and your neighbors property who may not want to be a part of the whole thing) to the effects of a lease.