For the past several years, landowners have been joining landowner groups and coalitions in order to obtain better financial and operational terms for their oil and gas leases. The concept of landowner groups originated in central Pennsylvania approximately seven years ago, when landowners realized that they had little bargaining position when attempting to negotiate with oil and gas companies who were leasing tens of thousands of acres. By banding together and negotiating a lease on a group basis, landowners have been able to level the playing field with the oil and gas companies and often obtain better terms for the oil and gas leases than they could obtain on an individual basis.
The Marshall and Ohio Counties Leasing Group has recently been formed. The purpose of the formation of this group is to capitalize on the fact that energy companies are now interested in exploring the Utica Shale, in addition to the Marcellus Shale, in Marshall and Ohio counties. The firms of Gold, Khourey and Turak; Berry, Kessler, Crutchfield, Taylor and Gordon; Daniel Guida; and Rokisky and Associates have joined forces to represent landowners in Marshall and Ohio County who have not yet leased their acreage, have current leases that only include the Marcellus Shale or who have signed leases in the past, but such leases have or are about to expire.
Landowner groups work together to become informed of market values in their area as well as important provisions that should be included in the lease. Typically, the group is led by attorneys who negotiate a "master lease" and make bid proposals to the energy companies.
The administration of landowner groups has varied greatly. In some instances, the decision to sign a lease is made by the leaders of the group, board of directors or a certain percentage of the members of the group (for example, a majority of the members of the group.) Groups run in this fashion take the individual decision of whether to sign a lease out of the landowners' hands. Also, some groups have a "tail" that states in the event a landowner decides not to sign a lease negotiated by the leaders, the landowner still may owe a fee to the group leaders in the event that in the future they sign a lease with another company.
The Marshall and Ohio Counties Leasing Group will be administered in a manner that will allow the individual members of the group to decide whether or not to sign the lease. If members desire to opt out of the group and not sign a lease they may do so at any time, and would be under no obligation to pay any fee. Additionally, it is the goal of the group leaders to have the oil and gas company pay the fee, so that it will not be deducted from the bonus monies the landowners will receive. There is no fee on royalties received by the group members.
Jeffrey J. Rokisky is an elder law attorney with offices in Wheeling, Weirton, Elkins, Clarksburg and Robinson Township.
To submit a question for publication, email it to rrokisky@ rokiskylaw.com