Landowners considering whether to lease their gas rights to a drilling company should be aware of both the
promises and the perils, and the option of negotiating a better agreement than that contained in the form or model lease you may be asked to sign.  Your most
important right is the right not to sign a lease with which you are not satisfied.

The pay-off may not be as great as you expect, after
expenses are deducted from your standard 12% share of the royalties.  Pro Publica, an independent, non-profit
newsroom, recently wrote about this. Landowners in Pennsylvania found it to their advantage to join together to negotiate as a group with the company.

In addition to the water well, associated wastewater ponds, gravel roads, pipelines and pumping stations that could be built on your land, there could be tons and tons of waste rock from the well drilling, called “cuttings,” which could be spread out and left on your land.  There’s a recent West Virginia case about this, upholding the drilling company’s right to do this.
 
Other issues to watch for in your lease include liability for offsite pollution, reclamation of surface disturbances and the location of pump stations and hours of operation.

Finally, that six or seven-year lease you are thinking about signing is typically renewable or extendable at the company’s discretion.   It could turn into a 30 or 40-year lease, whether you want it to or not.

Please study any proposed lease carefully. And consult with an attorney who is knowledgeable about oil and gas leases before you do sign. For more general information, the West Virginia Surface Owners’ Rights Organization has a good website to explore:  www.wvsoro.org.

Here’s a link to the full Pro Publica article:
http://www.propublica.org/article/unfair-share-how-oil-and-gas-drillers-avoid-paying-royalties)

By Rick Parrish
Rick Parrish is a senior attorney with the Southern Environmental Law Center in Charlottesville, Va.

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