Topic: Shale-gas land leases: Owners unite, hire lawyers

[speedy]

When Ohio’s oil-and-gas boom comes calling, Richland County farmer Robert Bevier says he and about 130 neighbors will be ready.

As chairman of the BEST (Best Efforts Stand Together) Land Association, Bevier says his group is ready to negotiate terms for oil and gas leases that would cover about 19,000 acres of privately owned land, most of it in northern Richland County. The only thing missing is a good offer.

“There’s none that we’d call serious,” Bevier said. “It’s just progressing its way across the state, and we’re on the western part of it.”

Energy companies eager to win rights to drill in the Utica shale are moving west from eastern Ohio counties. With tales of bonus payments now as high as $5,000 an acre in eastern Ohio, the number of ownership groups, and lawyers eager to represent them, is exploding.

“They are popping up all over the place,” said Dale Arnold, energy-policy director for the Ohio Farm Bureau Federation. “There are a lot of companies offering services.”

Arnold is among a number of experts warning Ohioans to carefully consider offers, not only from drilling companies, but also from law firms and businesses that want to organize and represent landowners.

One big question is how much negotiators should be paid for their services. Arnold said compensation rates range from 1 to 7 percent of the bonuses that oil and gas companies pay landowners in return for signing leases. “It’s all across the board,” he said.

Energy companies are scrambling to secure rights to drill into Ohio’s Utica shale because horizontal drilling and hydraulic fracturing, or “fracking,” allow them to draw oil and gas from the tightly packed rock.

Although only a handful of such wells have been drilled in Ohio, geologists believe that the Utica shale contains a rich reservoir of natural gas, propane, butane and crude oil.

Energy companies focused on eastern Ohio first because it’s more likely to contain natural gas and oil in commercial quantities. Farther west, the shale is believed to contain more crude oil than gas.

Columbus lawyer J. Richard Emens said he is working with six groups, including the Mohican Basin Landowners Association, which covers property owners in Ashland, Coshocton, Holmes, Knox, Richland and Wayne counties.

Because groups represent large tracts, they are able to negotiate higher payments and better protections against pollution, water loss and property damage, Emens said. He said he typically collects “in the 1 percent range” from lease bonuses.

Bob Rea, a former Columbiana County farmer turned negotiator, said he charges 2.75 to 3 percent for his services. Rea said he has helped close several eastern Ohio lease deals that cover more than 100,000 acres.

Among other groups, Rea is working with the Holmes Energy Leasing Partnership, which was formed by Dr. Thomas Berg, a retired pediatrician. Berg said the group includes people who combined own about 5,000 acres in Holmes County.

Bob McClelland, an attorney with the Zanesville-based firm Graham & Graham, is working to form an ownership group that would include landowners in Muskingum, Perry, Coshocton, Morgan and Licking counties. His firm would collect 7.5 percent of the bonus payments.

McClelland said that rate is reasonable because his firm won’t accept bonus payments that are less than $3,500 an acre. He said the firm also will require that royalty payments, which are regular fees that energy companies pay to landowners, be no less than 16 percent of the value of the extracted oil and gas.

Pittsburgh-based Homeland Energy Ventures would collect 5 percent of the bonus payments and 5 percent of the royalty payments. That’s according to a contract available on the company’s website.

Emens called such contracts “unconscionable” because the negotiator gets payments that continue as long as the well produces oil and gas.

Homeland’s president, Jack Sordoni, didn’t return calls seeking comment.

Arnold said landowners need to ask the right questions before they sign a contract.

“You have to be just as diligent picking and choosing and enrolling in a negotiation group,” he said, “as you would signing a lease with an oil-and-gas broker.”



http://www.dispatch.com/content/stories/local/2011/11/13/owners-unite-hire-lawyers.html

[cateyes]

 they  best be careful.....

we have local attorney firms handling issues as this, also....fees amount I have no idea..

[Kilroy]

Best be watchful of these "Landowner Associations".
They charge an arm and a leg for the little they do.
Get educated and negotiate your own deal. Why
would you pay some clowns $100/mo??? Some
of these associations have ulterior motives, like
driving the industry out of Ohio. 
Another thing, why all the flack about a
few truck loads of brine???
Don't people realize that approx 1500ft down,
exists a virtual ocean of salt water, contained in
lime and shale formations.
50,000 semi tanker loads would literally amount
to a drop in a bucket!
People need to get educated!

[rabbit]

I for one am against fracking because I have seen what it can do. My parents lived in the northern part of Knox Co. and had great drinking water. There was an old oil well across the valley from where their house was. They had great tasting well water but after the well was fracked, the drinking well and spring nearby was ruined by thr fracking brine. They had the guy from the county come out and test the water thinking that he would declare the well ruined and as a result condem the well. He took a sample from the fauset and then tried to drink it. He spit the water back into the sink saying he couldn't stand the taste. He couldn't give the water a bad grade due to some regulation about it being well water. They wound up moving to get away from the nasty unusable water.                       Lets STOP the fracking.

[Kilroy]

I for one am against fracking because I have seen what it can do. My parents lived in the northern part of Knox Co. and had great drinking water. There was an old oil well across the valley from where their house was. They had great tasting well water but after the well was fracked, the drinking well and spring nearby was ruined by thr fracking brine. They had the guy from the county come out and test the water thinking that he would declare the well ruined and as a result condem the well. He took a sample from the fauset and then tried to drink it. He spit the water back into the sink saying he couldn't stand the taste. He couldn't give the water a bad grade due to some regulation about it being well water. They wound up moving to get away from the nasty unusable water.                       Lets STOP the fracking.
[/quot

Sounds like old pipe and a poor cementing job, I would have sued them.

[cateyes]

OR the well/casing just went bad and it was 'thought' to be the fracking

I for one am against fracking because I have seen what it can do. My parents lived in the northern part of Knox Co. and had great drinking water. There was an old oil well across the valley from where their house was. They had great tasting well water but after the well was fracked, the drinking well and spring nearby was ruined by thr fracking brine. They had the guy from the county come out and test the water thinking that he would declare the well ruined and as a result condem the well. He took a sample from the fauset and then tried to drink it. He spit the water back into the sink saying he couldn't stand the taste. He couldn't give the water a bad grade due to some regulation about it being well water. They wound up moving to get away from the nasty unusable water.                       Lets STOP the fracking.
[/quot

Sounds like old pipe and a poor cementing job, I would have sued them.

[Kilroy]

Sometimes, the tailing pit will leach or communicate
with a water course, temporarily "poisoning" a nearby
waterwell.  The pits are lined now. Its weird, the public
is just becoming aware of  75 year old process. In the
old days, people would gather from miles away to witness
a nitroglycerin  shot.  I guess it's the same syndrome as
the "where do my groceries come from?"

OR the well/casing just went bad and it was 'thought' to be the fracking

I for one am against fracking because I have seen what it can do. My parents lived in the northern part of Knox Co. and had great drinking water. There was an old oil well across the valley from where their house was. They had great tasting well water but after the well was fracked, the drinking well and spring nearby was ruined by thr fracking brine. They had the guy from the county come out and test the water thinking that he would declare the well ruined and as a result condem the well. He took a sample from the fauset and then tried to drink it. He spit the water back into the sink saying he couldn't stand the taste. He couldn't give the water a bad grade due to some regulation about it being well water. They wound up moving to get away from the nasty unusable water.                       Lets STOP the fracking.
[/quot

Sounds like old pipe and a poor cementing job, I would have sued them.

[cateyes]

 I have learned many wells around here of old..have no casing and are shallow....so only God knows what can end up in them...

i don't know alot about the exact process of fracking...studying it to learn...but yes from what I understand it is not new--it is an old process just being used more.

tailing pit...will have to figure out what that is...got an idea...have to see if I guessed correctly

oh and where do our groceries come from....ask a PETA member/demo...if we would just go to the grocery store..animals wont have to die to feed us!!

Sometimes, the tailing pit will leach or communicate
with a water course, temporarily "poisoning" a nearby
waterwell.  The pits are lined now. Its weird, the public
is just becoming aware of  75 year old process. In the
old days, people would gather from miles away to witness
a nitroglycerin  shot.  I guess it's the same syndrome as
the "where do my groceries come from?"

OR the well/casing just went bad and it was 'thought' to be the fracking

I for one am against fracking because I have seen what it can do. My parents lived in the northern part of Knox Co. and had great drinking water. There was an old oil well across the valley from where their house was. They had great tasting well water but after the well was fracked, the drinking well and spring nearby was ruined by thr fracking brine. They had the guy from the county come out and test the water thinking that he would declare the well ruined and as a result condem the well. He took a sample from the fauset and then tried to drink it. He spit the water back into the sink saying he couldn't stand the taste. He couldn't give the water a bad grade due to some regulation about it being well water. They wound up moving to get away from the nasty unusable water.                       Lets STOP the fracking.
[/quot

Sounds like old pipe and a poor cementing job, I would have sued them.