Perhaps sensing an opportunity with an ongoing, now four-year-old drilling moratorium and the desperation of some landowners in New York State, a Texas-based land company is soliciting property owners in Chenango County, NY to purchase a 50 percent share of their mineral rights for $1,000 per acre. While it may technically be legal, county officials warn landowners that such a deal will damage the value of their property:
A Texas-based company, Griffith Land Services, has been soliciting Chenango County property owners with offers to purchase their mineral rights. Letters have surfaced from towns in the northwest quadrant of the county, according to the county planning department.
The move would permanently separate the mineral estate underground from the surface property and is legal. A representative from Griffith did not return phone calls to The Evening Sun, but a copy of their draft deed offers to buy 50 percent of a landowner’s acreage at $1,000 per acre for any and all strata.
The price is lower than the $3,000 to $4,000 per acre lease offers that oil and gas companies placed on the table for Pennsylvania landowners during the Marcellus Shale boom. While those offers never made it into New York before the state banned shale drilling, some Chenango County landowners who previously leased their sandstone rights to Norse Energy, Inc. see that their contracts are expiring soon, and might view the new prospect favorably.
Also appealing, is Griffith’s offer to purchase 50 percent rather than all of a landowner’s subsurface rights. It makes the deal sound as if a partnership were being created between the company and the landowner.
But don’t be fooled, county officials say.
“It looks like it means they have to call you before they act on their portion of ownership, but that’s not true,” said Chenango County Attorney Alan Gordon.” You are giving up the lot. It will severely depreciate the value of your property.”*
*Norwich (NY) The Evening Sun (Apr 10, 2012) – Offers for mineral rights surface in Chenango County