Lawyers Want Landowners To Join Utica Shale Group
Northern Panhandle landowners who did not lease their oil and natural gas rights could soon hear from one or more companies hoping to sign them to contracts for these minerals.
Lawyers speaking at the Wednesday mineral owners meeting at Moundsville’s Grand Vue Park believe they can achieve a better deal by joining the lawyers’ already formed coalition.
“We believe in strength in numbers,” lawyer Jonathan Turak said, adding the group already has commitments from mineral owners controlling about 5,000 acres in Marshall and Ohio counties. “When you sign a lease, you are getting in bed with an elephant. In order to corral the elephant, you need a strong fence.”
Turak and lawyer Jeffrey Rokisky told mineral owners they would negotiate and oversee aspects of the agreement if landowners agree to pay the lawyers 6 percent of the lease money. However, they will try to get the company to pay this fee.
They said many Northern Panhandle landowners who signed leases over the last few years may still be able to sign lease for the Utica shale. This is because some leases are only for Marcellus shale rights.
The Marcellus shale and the Utica shale are both rock formations that lie deep within the earth, with the Utica even deeper underground than the Marcellus. West Virginia and Pennsylvania are usually associated with the Marcellus while Ohio is associated with the Utica. However, both rock formations are found in all three states at various depths.
Rokisky told attendees that drillers will be allowed to use forced pooling for the Utica drilling. In this practice, if neighbors have signed leases with a particular drilling company but an individual refuses, that individual can be forced to allow their land to be used by gas drillers for the development of your neighbors’ gas. West Virginia law does not permit forced pooling for Marcellus drilling.
Answering several questions from the audience, Rokisky told landowners they should not exclusively focus on the proposed payment amounts. In the Upper Ohio Valley, contracts are known to offer payments as high as $7,300 per acre with 20 percent of production royalties, but as low as $5 per acre with only 12.5 percent of royalties.
However, Rokisky said the promised royalty money is irrelevant if the contract does not require the company to pay it.