NOTE: THIS IS ONE OF THE EARLIER ARTICLES REGARDING GAS LEASING, WELLS, ETC. ON THIS SITE. ALL ENTRIES ARE SEARCHABLE UNDER THE “GAS WELLS” CATEGORY. Please take the time to review these articles which are all documented, rather than just opinion.
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It seems that the longer these “landmen” run around the county attempting to get you to sign off on your mineral rights, the more questions are raised.
One of the more recent questions has been raised about the validity of these landmen. Are they operating within the scope of the law? This question has been raised by several in the real estate community who believe that the “landmen” who are signing leases on behalf of their respective companies are required to be licensed a real estate brokers. It is known that as of this writing, a complaint has been filed with the state real estate commission (the agency who oversees licensure in Pennsylvania). It will be interesting to see what their investigation will turn up.
Another group of landowners (presumably ones who leased their mineral rights for $25 - 100 per acre) believe they have found that these leases weren’t written in accordance with state law. It is the understanding of this writer that a class action has or will be filed shortly.
This is arguably the biggest transfer of mineral rights affecting the county in it’s history.
Where is our county government weighing in? Oh yeah, “they are looking into it”. Is there a connection with the proposed class action suit and a certain county commissioner who is also an attorney? Enquiring minds would like to know…
Better yet, did various townships and school districts sign on to these leases without proper advice, giving away a valuable asset for pennies on the dollar?
Does anyone have information they want to share here?
I wouldn’t think there’s much argument to it - this is clearly the largest REAL mineral rights transfer in the county’s history, at least dollarwise. The gas companies signed up nearly the entire county in the 60’s, then again in the 70’s and 80’s, but these were just $1/acre deals where the companies reneged on rental payments after the first year and never, to my knowledge, did any real exploration or drilling. Basically a tax write-off exercise for the companies.
Judging by the investment the various gas companies have already made here it appears they mean to follow through this time. And if it pans out as they predict it would be a major shot in the arm for our weak local economy, perhaps for many years to come. So those filing complaints about these landmen needing to be licensed real estate brokers (presumably the area’s existing licensed real estate brokers) might just be cutting off their collective nose to spite their face. After all, local property values have clearly risen dramatically over the past six months as a result of gas interests and these brokers, working on a percentage basis, are seeing their commissions rise along with them. Think about the long term, boys….
Those seeking to rescind signed leases by legal action would also do well to take a second look, after their knees have stopped jerking. Be careful what you ask for…you might just get it! Remember, the companies don’t have to pool your land with surrounding properties. Unless you have a huge tract of land they can choose to leave you out in the cold, and you may have to return the bonus money to boot. Oh yeah, and pay your attorney too.
Above all, if a county commissioner is the lawyer arguing to the court that all these leases are invalid (including those signed by owners who waited and are happy with their bargain) and should be set aside, isn’t he actually working AGAINST the interests of the vast majority of landowners to the benefit of only a few…and his own pocketbook, of course! Just one of many pitfalls arising from the wearing of two hats at one time, a conflict which should be obvious but sadly is not.
In other words, don’t be so quick to bite the hand that feeds you!
Imagine a commissioner running from the courthouse to his lawyer’s office to meet with clients… Then, throw in the job as various townships’ solicitor. Noble though it may be to wear so many hats, is it reasonable?
Also, at a commissioners’ meeting a few months ago, a member of the public offered to put some things on the blackboard about a mineral extraction tax (this person had experience of this sort elsewhere). The chief commissioner said ok, let’s do it at the next meeting. Still waiting… These three commissioners need to rely on the public more - there’s a lot of expertise out here.
And spread the wealth around by enacting a mineral extraction tax, and bring everybody’s taxes down a bit. Everybody’s. The winners shouldn’t just be those that lease their land, everybody should have a bit lower tax. Make these gigantic companies pay a county tax for the natural resource under us. They will do their drilling, eventually pump out what they want, and forget about us. They can pay the MET and still reap their hundreds of millions.
I would think that someone should go back up and read “justabumpkin”’s post here about cutting off the hand that feeds you. As someone who is inextricably linked to what is going on in Susquehanna County, I can tell you that there is a tremendous impact already being made on the economy. You can’t see it? Stop and think about all of the money being spent in this area for hotels, motels, restaurants, gas stations, auto service, business supplies, drugstores, clothing stores, card shops for the family back home, theaters, etc etc etc etc…need I go on here? I can tell you that in my estimation Cabot has spent millions already that has been pumped into the local economy, and its just getting started. Considering what is being paid per acre for leases, this writer thinks that maybe someone ought to slow down and think before instituting a MET. You might also want to find out what a mineral is too…has anyone considered that bluestone is a mineral? So you want to start taxing quarry owners and operators too? Amazing…how about an EET (electric extraction tax) for the coming windmills? Start taxing them before they’re built, or a TET (technology extraction tax) for cell towers? This landman is also a landowner, and quite frankly isn’t surprised (at the risk of sounding unpopular) that there are those who are quietly looking for ways to extract taxes from the good fortune of the landowners. If government actually decreased taxes due to another tax being added it would be a perfect world, but from what I’ve seen, government only finds more ways to spend your money instead, so be careful what you all wish for as you may get it.
Let’s get back to the impact for a minute…on second thought, have a cup of coffee with me sometime and we’ll discuss the economy and how it gets impacted by these gigantic companies that, according to some people, want to get all they can from you and then forget you. I have to laugh out loud…what do you think Walmart is doing to you, or any other store that’s not a mom & pop? I hope you don’t think Mastercard and Visa are going to think twice about you after you have hit your credit limit..other than squeezing you for high interest?, or better yet, what do they do for you if you don’t even use their services? Or are they exempt from criticism? Let’s get serious here…this is a wonderful resource that you have under your land…its already paid off mortgages for some people, paid for college educations, new cars, home improvements…etc.
I hadn’t planned on writing an essay here, and I’m sure I will be posting again, but in the meantime, rest assured that Cabot is definitely not interested in your “minerals” considering that minerals include your bluestone and your gravel…just for the record, in Pennsylvania gas and oil are not minerals..they are hydrocarbons. Figured I might as well throw that in. I also have to question why someone would wonder about the “validity” of a landman? What does that even mean? Validity? I am a licensed bonded professional auctioneer in Pennsylvania, and also a licensed Notary Public. Hopefully those positions are considered “valid”. As far as the real estate question goes, just for the record, we aren’t dealing in real estate; not listing it to sell, or selling it for you, we would rather leave that to the real estate professionals. Last but not least (at least for now), I would be willing to bet you a nickel that the person or persons that are trying to push a class action lawsuit is an attorney that is trying to find a way to make some money from this “gold rush” as it appears to me, upon information and belief, that the only people who make a lot from a class action suit are the attorneys who file it. Am I wrong? I would welcome any attorney to respond to this with a few examples of class action suits that have paid off big time for the plaintiffs. Just so you know that I’m not hiding behind a user id here, my name is Phil McIntyre, and I’m very proud to be representing Cabot Oil & Gas…and it’s Cabot’s money paid to the Shadowbrook here in Tunkhannock, and to the local stores that is helping to impact the economy. I’ll get off my soapbox now.
Mr. Landman: It’s nice to see you are a licensed auctioneer and a notary. Unfortunately, neither of these qualifications allow you to act as an independent contractor and lease (an interest in) real estate. I direct your attention to the following link which is to Chapter 35 SubChapter B of the Department of State (Pennsylvania) Bureau of Professional and Occupational Affairs. These are the same people who also license auctioneers.
http://www.pacode.com/secure/data/049/chapter35/subchapBtoc.html
Specifically, under definitions, 35.201 - broker. please note (i) which states “Negotiates with or aids a person in locating or obtaining for purchase, lease or acquisition of interest in real estate.” If a gas lease isn’t acquiring an interest in real estate, I would be very surprised. Also, note (vii) which refers to attempting to do anything in this section.
Reading further, under section 35.202 - Exclusions from the Act, ” (3) An officer or employe of a partnership or corporation whose principal business is the discovery, extraction, distribution or transmission of energy or mineral resources, if the purchase, sale or lease of real estate is a common and necessary transaction in the conduct of the principal business.”
Unless you are an employee or an officer of the corporation, and I will be you a nickel you are not, a very strong case can be made that you and all others acting as independent landmen in Pennsylvania are operating outside the scope of the law.
If a person attempted to act as a bond trader, insurance salesperson, attorney or a whole host of other occupations including auctioner - without the appropriate licensure, they would have a significant legal problem.
The argument here is that the various landowners were not made aware of their rights. One very simple question will prove that. Were any of the property owners EVER given a copy of the Consumer Notice? In case you are not aware, it is available in Section 35.336. Here is the link
http://www.pacode.com/secure/data/049/chapter35/subchapEtoc.html
It is required that all licensees give this explanatory notice to all potential consumers of real estate services at the initial meeting.
Please explain, why hasn’t a company the size and reputation of Cabot made certain that it’s independent contractors, representing them aren’t operating within the scope of the law? While it may not be necessary in other states, according to what has been provided above, it certainly is here.
I anxiously await your response on this matter.
Beyond that, this writer tends to agree with some of what you have written and takes exception with much more. I look forward to a responsible discussion.
It appears to me that you are confused in relation to “real estate” vs “oil and gas rights”. We are not leasing real estate. Further, why does it sound to me like you have a bone to pick? Are you a real estate broker? An attorney? How about identifying yourself? Lastly, I made the point about the auctioneer’s license and the notary license only in relation to the remark about “validity” concerning landmen as you well know. I am more interested in why you are having such a problem with the discovery of natural gas in this area? As far as operating within the scope of the law goes, it is painfully obvious that you are only making waves here to confuse landowners…my suggestion, once again, would be to identify yourself so that the good people of Susquehanna County can understand what your part in all of this is.
Post Script…You might want to know that as a Pennsylvania licensed auctioneer that I am authorized to enter into a contract to list, show, and sell your real estate without a real estate license. Am I still “invalid”? I won’t give you the link to go look for, but rather I will give you a copy and paste of the law as it pertains to my profession:
RL 127.02 Auction of real estate. (1) AUCTIONEER. An
auctioneer may engage in, or advertise or otherwise hold himself
or herself out as being available to engage in, the calling for and
the recognition and acceptance of offers for the purchase of real
estate at an auction, and may handle sales proceeds, down payments,
earnest money deposits or other trust funds received by the
auctioneer on behalf of the auctioneer’s principal or any other person
at or as a result of an auction of real estate.
Of course, as it’s not specifically spelled out in the language of the law, an auction can be private or public, but I think you’d agree that goes without saying. Lastly, I should mention that I don’t have to use my professional license to lease oil and gas rights as, once again, we aren’t dealing in real estate.
I believe it is you who is confused. The ownership of real estate is generally defined as receiving a “bundle of rights”. If you hypothecate any of these rights, you are transferring a partial interest in real property. That is very basic.
Second, if you are invoking your auctioneer’s license to justify your business with Cabot, that is a matter for the Bureau of Professional and Occupational Affairs to deal with.
Third, I don’t buy the argument that Cabot or any other company coming here is the great savior. Your company and all others like Cabot are here for one reason only. That is to obtain access to the product for the lowest possible price. If your company is paying $1,500 per acre and 15% that is a joke. What about the other 85%? By the way, isn’t it true that PA State Gamelands are getting 29+%?
Forth, I have no problem with anyone leasing their gas, oil or mineral rights, only that landowners are truly aware of what they are getting themselves into. Further, more than a few landowners have been coerced into signing because they were told that if they didn’t, the gas would be taken from under them anyway. Lousy business practice.
Oh yes, and what about those small parcels which are surrounded by larger parcel which are leased. What about those people? They continue to subsidize the Clean and Green program while their neighbors have created a commercial use of ALL the acreage they have leased.
You have conveniently not addressed the issue of water usage to frac a well. The PennState video was very clear in stating the use of 800,000 gallons for one well. I would suggest to you that the most valuable commodity in Susquehanna (and surrounding) County(ies) is clean, abundant water. Not gas, oil or bluestone. If you don’t believe that, look at the Southeastern US, they are screaming for water. The same is true in California. It seems there could be a more efficient way to do this work, or maybe recycle the water.
By the way, this blog was started so that the participants could speak freely. Note the top of the page: “The Truth Shall Set You Free”.
The purpose of anyone remaining anonymous on this blog is to be able to freely and factually speak one’s mind without getting specific personalities involved. You chose to identify yourself. I don’t feel the need or desire to do so. However, you should realize, I am not speaking off the cuff, my comments are based in fact and that should be good enough.
By the way, are you quoting New York State law regarding your auctioneer’s license? I noted that you are apparently licensed in Pennsylvania through reciprocity. If I missed something here, I appologize.
To Drill in My Field:
You may be from Missouri, which I doubt, but here is the proof. Check out this site
http://www.nwpoa.info
This is a group of property owners in Northern Wayne and Eastern Susquehanna County who are negotiating a whole lot better deal than you have seen in this county. Having spoken with more than one participant, I stand by those numbers.
Regarding smell of gas - I realize that natural gas doesn’t smell, However, there were two guys walking around a gas well and specifically made that comment along with one about noise. Here is the link to that:
http://www.youtube.com/watch?v=8SzP0nO8EFM
Education is important, not enough research was done by the landowners. They just smelled quick money. Did you?
Finally, I explained before that users of this site do not have to disclose who they are, as long as what they are posting is factual and without personalities getting involved. If a user does not choose to abide by this simple premise, he or she will be terminated from this site.
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 items such 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.
Please know that if you sign a lease, you agree to arbitration if there is a problem. That’s enough for most people who truly understand the procedure to never sign. Instead of your neighbors judging your situation, you will have three lawyers doing that. One chosen by you, one by the gas company and a third who is chosen by both sides. It is another way to separate you from you money and or land. Never waive your right to a jury trial by your peers!