Back in October of 2008 at our State Association of REALTOR (PAR) meetings we had a session on gas leases. The power point was provided by Greevy & Associates, 1460 Washington Blvd., Williamsport, Pa, 17701. ( 570-326-6561). Attorneys Lester Greevy and Dale Tice presented a great over view of what’s happening in Pennsylvania and across the nation. They are located in Tioga County which has been a hot area for tapping into Marcellus Shale.
Our biggest lesson learned then was that sub-surface rights (under ground) always trump surface rights. Next biggest was that title searches are only required to go back 60 years and that most gas leases were recorded in the 1800’s!! Buyers always take a property SUBJECT to the lease.
It’s very safe to say that trying to negotiate a lease without representation is not going to optimize your real estate portfolio. Terms of lease were reviewed and include cash bonus, royalties – 1/8 is state minimum, length of usually 5 years (watch out for the option to extend), and modifying by an addenda. Pricing revolves around several factors including how much land and how many bidders. Throw in the tax ramifications too and it’s time to contact these fellows or an attorney that specializes in gas leases!
The big caveat for agents, buyers and sellers, came out to understanding the consequences if there is a lease in place. Another issue that is currently being tested is the Clean and Green programs and whether a gas well leased by a separate party should jeopardize the owner of the property by being subject to removal from the program. This is currently left up to the county! Our State PAR NOW has a Google Group for Oil and Gas issues that our members are running into!
Within the past few months we’re hearing more discussions concerning the leasing of gas rights in our state FORESTS. On Tuesday the local Somerset Daily American paper had a story by Bruce Siwy concerning Ohiopyle, Laurel Ridge, Kooser, and Laurel Hill State PARKS. It appears all of the mineral rights are NOT owned by the state.
In January the Republican Herald ran this story by Robert Swift concerning state FOREST land. According to the article “Pennsylvania will realize $128 million in revenue from leasing drilling rights on 32,000 acres of forest in north-central Pennsylvania based on high bids submitted earlier this week by five companies.”
Here’s an editorial page from PennLive.com by the Patriot-News Editorial Board in February recommending a severance tax to be enacted on Marcellus Shale. We have been watching the oil and gas pages on the Department of Environment (DEP) web site. There’s a ton of information including updated maps of areas that have signed leases.
We bring this to your attention so you too can be a concerned citizen and begin to follow what is happening in our back yards!!
Chantal,
So many agents are unaware of the services that their dues dollars provide!! Our PA State REALTOR Association meets just three times a year and we ALWAYS try to be there as the speakers they provide are very current. Our message, being involved and staying informed provides clients much better service!
PAR has created a Google Group for REALTORS who are interested. If you want to join the Google Group, send an email to ANichols@parealtor.org.
[...] information of these gas leases back in 2008! That’s when our State REALTOR Association (PAR) had Attorneys Lester Greevy and Dale Tice from Tioga County speak to our members. They specialize in these types of contracts. In June we [...]