0 – 15 Minutes
Doug uses All Things Marcellus to promote his free oil and natural gas seminar for Pennsylvania oil and gas right holders and the value of oil and gas negotiation experience when negotiating natural gas leases, pipeline agreements and other development contracts. Doug explains how oil and natural gas companies send cold letters to natural gas rights holders and requests that the landowners simply take the enclosed legal documents to a notary and sign and return the documents to the gas company in a self-address stamped envelope. Landowners who receive letters from gas or pipeline companies requesting to execute powerful legal contracts must be extremely cautious and seek experienced oil and gas counsel before agreeing to any company presented offer. Landowners should never sign oil and gas agreements without consulting with a knowledgeable and experienced Pennsylvania oil and gas attorney to understand the contracts, their rights and potential opportunities to negotiate offers presented by the gas or pipeline company. Strong and intelligent negotiations will result in the property owner securing the most favorable gas lease, pipeline agreement, surface use agreement or other natural gas contract.
15 – 30 Minutes
Doug dives head first into two specific examples where the gas company wrote a letter to an oil and gas rights holder and requested that the landowner sign and immediately return the powerful and complicated legal document. In this case the company requested to reconfigure and alter the size and shape of an existing natural gas production unit in the Marcellus Shale formation. Doug walks through how landowners within the same natural gas production unit and can have extremely different interests depending on the size and location of the property and where the horizontal well bore is located. Also, the landowner must undertake a detailed analysis to determine whether any gas lease amendment and modification is best for their particular situation. What is right for one landowner may be absolutely wrong for their neighbor and one answer or evaluation does not fit everyone. Landowners find themselves in very different life circumstance and each person must evaluate their offer under the light of their particular circumstances. Remember, each Pennsylvania landowner in the Marcellus and Utica Shale formations must get specific legal advice for their unique situation.
30 – 45 Minutes
Doug walks through examples of how neighboring Marcellus and Utica Shale landowners may have completely opposite interests when requested to amend, modify or extend their existing oil and gas lease. Examples are provided of where one natural gas right holder’s interest is exactly opposite of other landowners interest even though they are located in very close proximity. Also, by signing company presented documents you may be unknowingly taking yourself out of a producing declared natural gas unit. In one example, a landowner who signs an amendment to their lease, sent by a company in the mail without further research and understanding, would be removed from a natural gas production unit with multiple wells producing and they will have agreed to remove their property from the producing unit and stop their royalty payments. As a result of simply signing company presented documents, the landowner may go years without gas royalties when they were already receiving royalties from a producing natural gas unit that initially included their property. Thereafter, there is no guarantee of future natural gas royalties or whether the future royalties will be much smaller or involve production from only one horizontal well versus multiple horizontal wells. As always, specific oil and gas advice from an experience oil and gas lawyer will best serve the landowner considering any amendment of their existing gas agreement. Stop relying on the gas and pipeline company landman to educate you! They work for the company!
45 – 60 Minutes
Doug provides another example where a natural gas company simply sent a letter requesting that the landowners sign a major modification to their existing “Friendsville” oil and gas lease. Again, neighboring landowners may have exact opposite interests when considering an oil and gas lease amendment or modification. In this case, smaller property owners whose property is located directly above a drilled horizontal well bore may want to reject or negotiate the amendment request as this landowner has leverage under the Friendsville gas lease form. However, a larger acre landowner, or a landowner whose parcel is not near a drilled horizontal well bore, may want to modify their gas lease to avoid there Friendsville lease expiring. Each property owner must study their situation as a wrong decision could result in a losing a landowner friendly gas lease with a high royalty percentage and ongoing development requirements. Every gas right owner must fully evaluate any offer or request from the gas or pipeline company prior to signing as a mistake may cost thousands, hundreds of thousands, and even millions of dollars depending on the situation. Whenever a landman offers the Pennsylvania landowner an amendment to their gas lease, surface use agreement, pipeline agreement or other contract, the landowner should first take a step back and contact an experienced lawyer that will fight for them and negotiate the best possible agreement. Of course, a smart and knowledgeable lawyer may advise the landowner to simply decline and reject the offer and wait for potential future opportunities. Never rush to sign a bad oil and gas agreement!
