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Local lawmakers help draft gas royalty legislation

July 3, 2013

Area lawmakers have co-sponsored legislation to make natural gas companies accountable for royalty payments made to landowners with drilling leases. State Reps. Garth Everett, R-Muncy and Matthew E....

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(15)

rick424

Jul-03-13 7:30 AM

So nice to deal with super honest NG companies. They even charge the landowner post production cost, how crooked is that! Now the government has to step in to fix it. This article is so full of "I told you so" statements.

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BornHere

Jul-03-13 7:46 AM

This is why you should have an attorney present with you when you are dealing with this industry.

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michaelpaternostro

Jul-03-13 9:52 AM

FYI- a lot of people seeked out help from attorneys but at that time, none had any real experience on the gas leases and were told to sign. Many landowners were told by landman that they would get 12.5% or 1/8th of the production of the wells, that is a lie. All that the landowners want is the 12.5% that the States "guaranteed minimum royalty act" was supposed to deliver but for some reason our very own State Supreme court rules against the landowners, go figure. Why have a minimum royalty act if it does not do what it says it will do. The gas companies will fight us with our own states law and they win almost every time. They have lots of our money!I agree, make sure you hire an attorney who is well versed in these leases or you will get a raw deal from the gas company, they could care less about you, they just want your gas. I also don't think that anything that our representitives do can change the leases that have been signed, at least that is what i am told from our sta

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michaelpaternostro

Jul-03-13 9:57 AM

state senator. I am also under the understanding that royalty owners can ask for an audit of a particular well pad or "unit" of royalty owners if they feel the charges are unreasonable, good luck with that and realize that your royalties will stop while the audit occurs. Maybe at that point the gas company will just shut your wells down, think it hurts them? It is a big game and we all know it, we just have to be on guard to keep them honest. Something should be done to correct the bad leases out there for the landowners in my opinion.

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Judgeandjury

Jul-03-13 10:38 AM

Instead of wasting an enormous amount of tax payer money in legislative time, we should ban this activity from our state. How many times does this industry have to prove themselves criminal before we realize that nothing is important to them except making as much money as possible while avoiding as much cost and responsibility as possible. They are taking the gas, and destroying our state. Once it is gone they will be gone too and we will be left with all of the financial and environmental damage. Until you folks realize this the NG industry will continue to pillage and plunder. A wise man I know once said "when you dance with the Devil you get what you get..."

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rick424

Jul-03-13 11:06 AM

The problem here was people were too trusting. And big business took advantage of it. And they want to be self regulated. Hey Bornhere google this. "Range and Cross Creek County Park" Maybe you read it, and you wonder why we don't trust these people.

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BornHere

Jul-03-13 12:17 PM

Thanks rick I didn't catch that one, but they never do anything wrong right? I'm done working for the week time to relax in the pool with my grand daughter.

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ToTEXASfromPA

Jul-03-13 7:27 PM

It is a business contract. It is important for anyone signing the contract to understand what it means.

If the well is a poor producer, gas price is low, or the well costs too much to drill, no one compensates the company that drilled the well. They are taking all the risk.

Frankly if it was up to me, I would want to participate in the drilling of the well and have a working interest. Or I would hold out for a higher royalty.

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northerntier

Jul-04-13 12:01 AM

Disagree with "They [the companies] are taking all the risk." First, there is little risk of an unconventional well equivalent of a conventional well "dry hole".

And if a occasional well doesn't meet expectations, the operator simply moves on to the next location. But for the rights owners in the unit, it's probably "game over".

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ToTEXASfromPA

Jul-04-13 8:00 AM

"Disagree with "They [the companies] are taking all the risk." First, there is little risk of an unconventional well equivalent of a conventional well "dry hole".

And if a occasional well doesn't meet expectations, the operator simply moves on to the next location. But for the rights owners in the unit, it's probably "game over"."--Northerntier

+++

The company is the one that put up the money and made the investment. They took the risk.

The royalty owner never had a "game" to begin with; they just didn't know it. They still got the lease signing money upfront and some royalty. It is more than they would have had otherwise.

If the royalty owner wasn't satisfied with the royalty amount or lease signing bonus, they should not have signed. If the company that wanted to lease their land was questionable, they should have added their own provisions or held out for someone else or not signed it.

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northerntier

Jul-04-13 12:43 PM

I'm not denying that Marcellus Shale development has brought significant financial benefit. But at this point, extraction is a proven technology with minor financial risk to prudent operators.

You seem to be positioning the industry as Colonists, arrived in a desolate area, inhabited by illiterate natives subsisting on roots and berries and living in caves. This is the U.S., where there is (now) private ownership of subsurface rights. The industry needs *our* gas. However, our (unleased) land was not worthless prior to unconventional gas development ... and it's not worthless today.

I'm not going to judge rights owners who leased early and now have regrets. But in the future, beware of strangers in oversize PUs and SUVs offering brightly colored beads in exchange for rights to your land.

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ToTEXASfromPA

Jul-04-13 10:57 PM

Northerntier,

You don't have to lease. You can drill your own well or participate in one.

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Garben78

Jul-05-13 7:03 AM

Should've consulted a attorney as we did from the west where this drilling has been ungoing for years as it was nothing new to them when we talked about it they was quite knowledgeable too bad you dummies signed early cheap leases and now have regret but you can't have the milk and cheese and the whole herd of cows also and yes by gas standards today if it's not being drilled or producing as for resale value it's virtually useless

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northerntier

Jul-05-13 11:54 AM

Garben78: Fortunately, PA's northern tier is not a "one trick pony" when it comes to land value. Some people simply like to live, retire, vacation, etc. in a rural area. The land can produce income from agriculture, timbering, leasing for hunting, etc. Admittedly it surprised me, but a nearby 50-acre parcel in a producing unit just sold - with the seller retaining the mineral rights - for the pre-Marcellus going rate.

It's also fiction that the area has no prior experience with conventional gas drilling. In Tioga County, the primary gas development period was 1930-1940. Between then and the short-lived Trenton/Black River period, there has been periodic drilling of mostly non-productive conventional wells.

ToTEXASfromPA: There is another option. Leave the gas where it is, for now. No, that wouldn't be acceptable to speculators. But, generally, if the rights owners have the money to buy into a unit, then they doesn't need the money the wells would generate.

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michaelpaternostro

Jul-08-13 2:29 PM

To Texas- had people not signed leases, they would have nothing from us. If they continue to operate in such a crappy fashion, they will lose in the end game.That would be what we all think of them, but that probably makes no difference to them either. Wait until they ask for something else!They will LOSE!BIGTIME! They try to say that whatever the landmen say is not their problem, but it is their problem as the landmen represent them. They know what they did,seems like you stick up for them ?? dont be stupid.

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