Questions about oil/gas leasing

Asked February 7, 2017, 5:18 PM EST

I live in San Diego, CA. I am 70 yrs old, retired, trying to exist solely on Social Security (@1200 a month). I inherited the oil/gas rights to some land my grandparents owned (part of a much larger unit) in Greene Co. I have had companies (speculators) trying to buy my rights for about a year (starting at 20K and last at 150K). I tried to consult with an attorney in PA, but he wanted about $1200 plus expenses to start. I am poor and could not afford it (would not accept contingency). Same problem with 2 other attorneys. Now, I have a company that wants to lease the rights. The offer seems good, but I don't know much about the process. From what I have found online, companies can rip off owners in lots of ways. The current offer is $50K plus 16% royalties. When I asked about fees, told that they could make the 16% on gross or net and that should offset the fees. No idea what the fees would be, nor how much the monthly royalty would be. Can you give me any help? Please? (Below asked for 'location and county' I live in San Diego Co, San Diego CA. The land is in Greene Co, Aleppo Township)

California

1 Response

I have had the chance to work on thousands of questions dealing with leasing land for shale gas drilling, including many in the region you are asking about. As such, it would be helpful to know how many acres of land are being considered for this lease? And you mentioned that the land is a part of a larger unit. Is that a "drilling unit" or a larger parcel of ground with other heirs? Could you also let me know if there is currently a lease on the property and what companies are currently making you offers on the lease? With that information, I am sure we will be able to give you additional assistance that will allow you to make a more informed decision as you move forward. You can also feel free to contact me by phone if you would like to talk through the specifics of this in that manner. My number is 570-916-0622 Please keep in mind that this is a complex legal question as much as it is financial. Legal advice is well advised as you already know and we will attempt to direct you to a source for that as well. In the meantime, here is a related Extension publication we use on leasing for you to read. http://extension.psu.edu/publications/ua448/extension_publication_file

Thanks
Tom Murphy