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Tractor Talk Discussion Forum

OT CGAS Exploration..

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Stan(PA)

06-11-2007 16:28:04




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Anybody have dealings with CGAS Exploration? Had a guy stop out, they want to get a lease for Gas drilling. Contract states so far from home, ect. and also that BOTH parties must agree on well locations. It"s all new to me, and they make it sound very lucrative (if they hit a good well), but I wanted to get opinions/experiences.
Thanks.... Stan




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RayP(MI)

06-12-2007 18:40:40




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 Re: OT CGAS Exploration.. in reply to Stan(PA), 06-11-2007 16:28:04  
We are in an expired gas field. A company came in, did a lot of work on wells, connected them with pipelines and installed a large compressor station. In short the gas field became a storage field. Many "leases" were issued, all with different terms. Company started renigging on the leases, in different ways. A number have looked into trying to sue for damages, etc. Can't find a lawyer with enough standing to take on the big company. Big company has most of the high powered lawyers on retainer. Besides, if it ever made it into the courts, they'd be able to stonewall it forever.... My advice get the best lawyer you can NOW. Have them go over the contract with a fine tooth comb. Then make them keep the contract.

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kyplowboy

06-11-2007 21:03:25




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 Re: OT CGAS Exploration.. in reply to Stan(PA), 06-11-2007 16:28:04  
My grandfather worked in the local oil industry for 40 years and we have a few old wells on the place, so I know a little bout it. My grandfather liked his job but hated his bosses like most of us in public work. He always said the only thing worse than an oil man is a logger. Get every thing in writing before you put a pin to anything, also go on and spend the $100 bucks to get a lawyer to look things over. Get a clause in there about how much they are going to pay for damages, put a price on every tree on the farm. Set a price for every acre they are going to mess up with roads and such. You can get rich quick if they hit a good hole but if you are only going to be getting a $20 a month and have to deal with head aches every day it ain't worth it. Also remember that if he "Ain't got front money, he ain't got money to do anything with it once he has a lease!!!"

Hope this helps some!

Dave

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MF294-4

06-11-2007 20:22:52




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 Re: OT CGAS Exploration.. in reply to Stan(PA), 06-11-2007 16:28:04  
Close to me,they are drilling gas wells and causing a big controversy. Drilling anywhere they want,even in a cemetery so I've heard if you can believe that. Some farmers have forciebly stopped them. Haven't heard anything for a while. Has cooled off I guess. Coal companys have given the mineral rights back to the county so the county government is leasing the rights. Farmer,landowner gets $40 per hole and look how many acres it ruines. Lots of rumores and accuziations.

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Billy NY

06-11-2007 17:15:52




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 Re: OT CGAS Exploration.. in reply to Stan(PA), 06-11-2007 16:28:04  
See and consult with an attorney, one who knows real estate and contract law, + other applicable law specific to these matters, read contracts/proposals with a sharp eye attentive to detail. Know whatever it is they propose, get everything in writing etc. etc. Also, these are just some initial common sense thoughts from someone with little experience in that area, interesting subject though, and am curious how the scope of these kind of deals can be negotiated so the landowner gets good benefit, seems like large corporations would try and steamroll people, kind of hard to trust what they propose isn't it ?

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mjbrown

06-11-2007 17:08:58




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 Re: OT CGAS Exploration.. in reply to Stan(PA), 06-11-2007 16:28:04  
Any wells near you? If there are they will play ball with you. If not they won't unless they think there is a ton of gas under you. Those guys came around here about 4 years ago and we signed up. We got a couple of rent checks, a few wells were drilled with in a couple of miles and they moved south about ten miles. They hit good gas there and have lost interest in us our last check was half of last years. Still it was free money.

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kyle in NY

06-11-2007 17:30:05




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 Re: get an attorney to review in reply to mjbrown, 06-11-2007 17:08:58  
I have a place in upstate New York where gas is plentiful. I had a company contact me because they were going to put a deep well in my vacinity and wanted me to sign a lease. It sounded great. Being the skeptic new yorker, I hired a local attorney to review the lease and they told me that the company was crazy and that they were not offering me enough money to tie up my land. They informed me that by law in NY you dont have to sign a lease to recieve the royalties of the gas and by law the company has got to pay you no matter if you signed the lease or not. The only money that you will be out of if you do not sign is the lease money (which I thought was minimal). I found that it is very hard if not impossible to get out of the lease and it can give you a very hard time if you want to secure a loan or sell your property. It can be like having a lien on your property. The leases usually stipulate that if they do hit gas that the lease is open ended and that they can get out whenever they want but you are stuck in it. My attorney told me what I should stipulate for and what the going rates are. I made my demands and I havnt heard back and I dont care. If you want to sign, do yourself a favor and hire an attorney who specializes in this. READ THE FINE PRINT!!! I can go on and on so if you would like to talk, send me an E-mail and we can make arrangements. Kyle

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Stan(PA)

06-11-2007 19:35:32




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 Re: get an attorney to review in reply to kyle in NY, 06-11-2007 17:30:05  
I tried to email you, but it kept saying I was emailing "Tweeter", in reply to F250 something or other. Anyway, I just copied and pasted it below.

Kyle, If you don"t sign the lease agreement, they won"t drill, will they? I"m confused, because you said they have to pay you, even without the lease. You can just give them permission to drill, but with no lease?
Thanks,
Stan
PS: Where are you in NY? I"m close to Erie, right between NY and Ohio.

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kyle in NY

06-11-2007 21:23:05




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 Re: get an attorney to review in reply to Stan(PA), 06-11-2007 19:35:32  
Stan, without the lease they cant drill on your property but they can still extract gas from your land if the well is on a nearby property. That entitles you to royalty if the vein runs under your property. The reason that they like to get signed leases from all who reside above the pocket is because they can also store gas in pockets under your land. They not only want the lease so they can possibly put a well up but also so they can store it. Once they store it there is no telling when they will actually sell it, and you only get paid on the sale of the gas. Since the gas is a commodity, who is to say that they wont pump and store it and who knows when you will see the money. In my case if they did this they would have been able to hold my lease untill the well dried up or they sold the gas(which ever came last). All of this for a one time lease fee. They made it seem that I would get the fee every year for the five years of the lease, but after reading the fine print it turned out to be a one shot deal. If they did not tap in the 5 years then I could get out or renew, but if they did, I would have been stuck. My place is on the southern tier, a town called Newark Valley one half hr west of binghamton and half hr south of Ithica. Lots of gas around the area. P.S. since I blew off the first company, another has been calling because they want to do testing on my land being that I am the only one in the area who has not signed. My neighbors are all kicking themselves for signing with the first company and locking themselves in for pennies. The crazy thing is that the attorney only charged me 75.00 to review the docs and to make up a laundry list of things that were not kosher. Even if it costed me a ton more it still would have been worth it. I'm not in the business of giving my land away for free. Also if they are to put a well on your property you should also get at least $10-15,000 for a "disturbance fee". They will want to fence off about an acre, and they have access to it whenever they want. You can also specify if you want a "Non disturbance clause" in which they only lease the mineral rights (under your land) and can not come on without permission. But either way your land is tied up. The only way I would have signed is subdividing my property and only signing the lease for the vacant land, but I just said screw it, not worth it. Kyle

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