Lease & Royalty Payments

Broome County | Lease & Royalty Payments | New York

Hope for NY Landowners? Kirkwood Coalition Gets Lease Offer
July 11, 2014July 11, 2014

Back in March, MDN started to hear rumors that the Kirkwood, NY Gas Coalition (outskirts of Binghamton, NY, in Broome County) would soon call for an all-hands meeting of coalition members to consider an offer to lease coalition land for drilling (see Kirkwood NY Landowner Group Actively Negotiating Lease Deal). Then all of the wheels fell off the wagon when NY’s highest court decided 3 of 5 town members can, at a whim, decide to ban shale drilling town-wide (see Shale Drilling in NY is Over – High Court Upholds Town Bans). We figured after that debacle the Kirkwood deal and any other pending deals would likely disappear like a summer morning fog when the sun rises. But what’s this? An offer has been made to members of the Kirkwood Coalition–and it appears to be a pretty good one…
Read More “Hope for NY Landowners? Kirkwood Coalition Gets Lease Offer”
Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Court: PA’s Landlord & Tenant Act Doesn’t Apply to Oil/Gas Leases
July 11, 2014July 11, 2014

A Pennsylvania landowner signed an oil and gas lease on 98 acres and later sold part of that acreage to someone else. The someone else promptly filed a “quiet title action” making the argument that the lease is invalid because of the Landlord and Tenant Act of 1951. The quiet title action put a cloud on the title to the property and the whole thing ended up in court. PA Superior Court recently ruled that “no,” the lease is not invalid and not under the purview of the Landlord and Tenant Act. Our friends at top law firm Babst Calland break it down for us…
Read More “Court: PA’s Landlord & Tenant Act Doesn’t Apply to Oil/Gas Leases”
Lease & Royalty Payments | Ohio | Statewide OH

Let’s Play Lease Poker – Calling the Lease Agent’s Bluff
July 10, 2014July 10, 2014

Psst, hey buddy, want to play some poker? A landman with inside knowledge sheds light on how drillers time their lease filings–particularly in Ohio. Bill Dannley writing in Ohio Oil & Gas likens the process to playing poker–knowing when to hold ’em and when to fold ’em. Before landowners are approached to sign a lease, a lot of work has already been done, according to Dannley. Expensive seismic surveys have been conducted and deeds have been researched. When a landowner signs on the dotted line, you might expect the landman to hustle on down to the courthouse to file the lease–but that’s not what usually happens…
Read More “Let’s Play Lease Poker – Calling the Lease Agent’s Bluff”
Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

MWCD Reinvesting $300M of Utica Shale Revenue over Next 10 Yrs
July 3, 2014July 3, 2014

The Muskingum Watershed Conservancy District (MWCD) covers more than 8,000 square miles of rivers, reservoirs and creeks that drain into the Muskingum River. It is the largest wholly contained watershed in the state of Ohio, covering about 20% of the state. MWCD owns 54,000 acres of land. Early in the Utica Shale boom in Ohio the MWCD was scared off from participating (see Muskingum Watershed Reverses Decision to Sell Water to Drillers). But it wasn’t long before the MWCD board found their resolve and started to not only sell water for Utica fracking, they started leasing land like crazy (see Antero Pays $15K/Acre, 20% Royalties for MWCD Piedmont Lake Lease). All of those water sales and leases for drilling are now paying off for MWCD rate payers and indeed for all Ohioans…
Read More “MWCD Reinvesting $300M of Utica Shale Revenue over Next 10 Yrs”
Lease & Royalty Payments | Statewide WV | West Virginia

WV Sees Rash of “Top Leases” for Shale Drilling
June 30, 2014June 30, 2014

Landowners in West Virginia who leased their property but for whom there has not been drilling may have a new source of income. According to an article in the Wheeling Intelligencer / News-Register, some companies are now offering what’s called a “top lease” to landowners without drilling. What, exactly, is a top lease?…
Read More “WV Sees Rash of “Top Leases” for Shale Drilling”
Access Midstream Partners | Chesapeake Energy | Energy Companies | Energy Services | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

2nd PA Class Action Lawsuit Against Chesapeake re Royalty Fraud
June 26, 2014June 26, 2014

We’ve only spotted this news in (so far) two legal publications, but last Friday the Suessenbach Family Limited Partnership, using a Wilkes-Barre, PA law firm, launched a “sprawling class action” lawsuit against Chesapeake Energy and Access Midstream accusing the two companies of a $5 billion scheme to defraud landowners out of royalties rightfully due to them. MDN previously covered how this scheme worked (see Chesapeake Shafting Landowners out of Royalties Mess Gets Messier). This is the second such class action against Chesapeake over royalties in PA we’re aware of (see Bad to Worse: PA Royalty Owner Asks Court for Chessy Class Action). There are all sorts of ramifications from this latest lawsuit…
Read More “2nd PA Class Action Lawsuit Against Chesapeake re Royalty Fraud”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

PA Royalty Bill 1684 Off the Agenda, Likely for Rest of 2014
June 20, 2014June 20, 2014

Pennsylvania landowners can and should be angry with the Republican-controlled PA House of Representatives. Word has just come that an important royalty bill–HB 1684–is now on the “back burner” until fall. Fall is the height of the election season and you know darned well nothing will get done on the bill at that point–so for all intents the bill is dead for this year. Which is a shame. What is HB 1684? Our shorthand name for the bill is the “stop Chesapeake Energy from screwing landowners out of their royalties” bill…
Read More “PA Royalty Bill 1684 Off the Agenda, Likely for Rest of 2014”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

OH Landowners Lose Important Lease Case to Chesapeake
June 17, 2014June 17, 2014

Sometimes the drilling industry gets a well-deserved black eye for their sleazy actions. This is one of those times. Chesapeake Energy took over low-ball leases signed in Jefferson County, OH in 2007 that awarded landowners $10 per acre. The lease calls for paying $10 per acre until the land is drilled. Original term of the lease was five years. But at the end of the five years Chessy automatically renewed it based on something called “paragraph 19” in Ohio’s contract law. Chessy says the language in the lease allows them to renew with the same screw-ya terms. Thing is, landowners who waited now get thousands per acre when signing a lease…
Read More “OH Landowners Lose Important Lease Case to Chesapeake”
Belmont County | Energy Companies | Lease & Royalty Payments | Ohio | Rice Energy | Utica Shale

Rice Energy Does 2nd Deal with Belmont County, $8,200/Acre!
June 16, 2014June 16, 2014

In April, Belmont County officials signed a lease with Rice Energy to allow drilling on 406 acres of county-owned land for a staggering $7,500 per acre and 20% royalties. They liked it so much, they immediately put another 426 acres up for bid (see Belmont County Shopping New Deal to Lease Additional 426 Acres). It didn’t take long for Belmont County to sign a new lease with Rice for the second parcel–for an even higher $8,200 per acre signing bonus with 20% royalties…
Read More “Rice Energy Does 2nd Deal with Belmont County, $8,200/Acre!”
Belmont County | Energy Companies | Lease & Royalty Payments | Ohio | Rice Energy | Utica Shale

More Sightings of “Bigfoot” (Well) in Belmont County, OH
June 10, 2014June 10, 2014

Rice Energy’s “monster” well in Belmont County, OH, called the Bigfoot 9H, is still making waves (see Rice Energy’s Bigfoot New Reigning Utica Well Champ – 42 Mmcf/d!). After five days of production, the well settled in at an initial production flow rate of 42 million cubic feet per day (Mmcf/d)–the best ever IP for a Utica Shale well. MDN told you what Dan Rice IV, CEO of Rice Energy, said is the secret to their success with Bigfoot (see The Secret of Rice Energy’s Success with the Utica Bigfoot Well). Now comes word that Rice is drilling another well very close to Bigfoot. And we’ve found a second secret to Bigfoot’s success…
Read More “More Sightings of “Bigfoot” (Well) in Belmont County, OH”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Michigan | Statewide MI

Michigan AG (Unbelievably) Files More Charges Against Chesapeake
June 9, 2014June 9, 2014

Dang if the Attorney General Bill Schuette from Michigan isn’t determined to shake down Chesapeake Energy for a boatload of money. Apparently Schuette’s political future rests on being able to get something out of Chesapeake, who so far has been unwilling to bend over and take it. We’re referring, of course, to Michigan’s use of illegally obtained emails that allegedly show some sort of collusion between Chesapeake and Encana to obtain state land leases for drilling at a low price. AG Schuette has filed yet more charges in the case. The feds investigated and found nothing (see Feds Clear Chesapeake & Encana in Collusion Case, Michigan Next?). Usually a state will go along with a finding by the federal Justice Department. But not Schuette from Michigan. He has his heart set on grabbing a few hundred million from the “deep pockets” of oil and gas companies…
Read More “Michigan AG (Unbelievably) Files More Charges Against Chesapeake”
Belmont County | Energy Companies | Hess | Industrywide Issues | Jefferson County (OH) | Lease & Royalty Payments | Litigation | Ohio | Utica Shale

Hess Wins Case Against One OH Landowner, Settles with Others
June 2, 2014June 2, 2014

Last October MDN told you about a court case that Hess lost in a lower Ohio court. Hess promised to “vigorously challenge” the decision and appeal it to a higher court (see Hess Will Challenge OH Court Decision to End Lease). The crux of the case: Hess purchased leases from Mason Dixon Energy and didn’t live up to the terms of the lease–they didn’t drill within five years and didn’t make an extra payment–then tried to make up for it at the last minute with payments to extend the leases. Three landowners won that original case, but on appeal, Hess has won against one of the landowners and it appears Hess is ready to settle with the other 300 or so landowners in the area that are affected…
Read More “Hess Wins Case Against One OH Landowner, Settles with Others”
Energy Companies | Halcon Resources | Industrywide Issues | Lease & Royalty Payments | Ohio | Pipelines | Regulation | Trumbull County

Girard City Council Approves Pipeline Easement for Halcon
May 30, 2014May 30, 2014

Girard City (Trumbull County), OH Council members made a smart move. Earlier this month the Girard City Council voted to approve a right-of-way agreement that allows a natural gas transmission line to run through part of the Girard Lakes property. The 14-mile pipeline will service and run from Hilcorp Utica wells near Vienna to a fuel depot near Lordstown. Why was it a smart move?…
Read More “Girard City Council Approves Pipeline Easement for Halcon”
Chesapeake Energy | Encana Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Michigan | Statewide MI

Chesapeake Says Michigan AG is Cherry Picking Emails in Case
May 28, 2014May 28, 2014

Chesapeake Energy is, much to the consternation of Michigan’s overzealous Attorney General Bill Schuette, not rolling over, playing dead, nor coughing up big bucks in payoff money over alleged “collusion” to suppress auction prices for gas leases (see Michigan AG Continues Case Against Chesapeake for Lease Collusion). The case Michigan has built hinges on arguably illegally-obtained internal emails from Chesapeake, obtained by the Reuters news service under a still-unaccounted for method (see Did Reuters Break the Law with Latest Chesapeake Story?). Chesapeake says AG Schuette is, in essence, cherry picking and disclosing a few emails to cast the company in a bad light…
Read More “Chesapeake Says Michigan AG is Cherry Picking Emails in Case”
Energy Companies | Lease & Royalty Payments | Ohio | Protege Energy | Utica Shale | Washington County (OH)

Delay in Leasing City-Owned Land Costs Marietta, OH Big $
May 22, 2014May 22, 2014

The mayor of Marietta, OH says the city probably missed the boat to lease 95 acres of city-owned land for Utica Shale drilling–and he blames city council for dithering about getting an ad placed to announce the land is available (death by committee). But perhaps all is not lost…
Read More “Delay in Leasing City-Owned Land Costs Marietta, OH Big $”
Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

Status Report on PA Royalty Bill HB 1684 – Recess Limbo
May 12, 2014May 12, 2014

As MDN told you three weeks ago, Pennsylvania House Bill (HB) 1684 has hit some turbulence on its way to quick passage (see PA HB 1684 Guaranteed Minimum Royalty Act Hits a Snag). The bill, as originally introduced, was supported by the PA chapter of the National Royalty Owner’s Association and would provide for landowners to receive a minimum 12.5% in royalties, disallowing some of the shenanigans Chesapeake Energy has engaged in with reducing post-production expenses via a back door (see PA NARO Alert: Tell Your State Rep to Vote YES on HB 1684).

But along the way the drilling industry objected–rather loudly–saying lease contracts signed by two parties, the landowner and the driller, should not be modified by the legislature (see Rare Schism Between Landowners & Drillers over PA Royalty Law). Since the original bill, a number of amendments have been proposed, one of them that may well get adopted, that would fundamentally gut the intention of the bill to provide a minimum 12.5%. Lawmakers debated HB 1684 and amendments last week–before adjourning and heading out of town for a 3-week recess (wish we had a 3-week vacation whenever we wanted!). Here’s a status report and update on what happened last week and where things now stand with HB 1684…
Read More “Status Report on PA Royalty Bill HB 1684 – Recess Limbo”