News
May 26, 2008
Landowners pressured on gas leases

Unsuspecting property owners around the country are getting trampled in an old-fashioned land rush by natural gas companies and speculators trying to lock up long-ignored drilling rights quickly and cheaply.

Stories of fast-talking industry representatives using scare tactics to strong-arm people into signing lowball leases are popping up in rural areas and suburbs from New York to West Virginia to parts of Indiana and Texas. All sit atop largely untapped natural gas deposits made suddenly viable - and valuable - by soaring prices and improved drilling techniques.

West Virginia farmer and convenience store owner Brad Castle is still smarting from his experience.

Castle and his father thought they were getting a windfall when they signed a $5-an-acre lease and promise of 12.5 percent royalties for the gas rights to 800 acres they own near Rowlesburg in northern West Virginia. The process started when a landman - an industry term for a person who secures mineral rights - knocked on their door.

"They're very nice people, the ones that come around. You thought you could trust them," said Castle, who adds that he was warned to sign or drillers would siphon the gas beneath his property without paying him a dime.

His feelings of trust evaporated when rival companies started offering $350 an acre and royalties as high as 15 percent.

"They knew what they were doing when they come in, but we didn't," said Castle, who's hired a lawyer to look into breaking the lease. "There's got to be a law broke somewhere."

Retired dairy farmer Dewey Decker heard similar pitches when landmen started showing up in New York's Broome and Delaware counties.

"They were offering like $25, then $50," Decker said. "Quite a few people signed for $50."

But Decker held out and formed a pool with other landowners that has grown to more than 40,000 acres. The approach worked: Decker's group agreed to a five-year deal that pays $2,411 an acre and a 15 percent royalty.

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Posted By: Cheryl (1:01pm 05-27-2008)
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These people have a right to say yes or no. What about the landowners who only own the surface, not the mineral rights?? We have no rights, we are trampled on and taken advantage of. This would make a very good story for the news!! No one seems to know how wrongly we are treated!!

Posted By: sas (3:08pm 05-26-2008)
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Remember this is a negotiation for both sides. No one can force anyone to sign and keep in mind, landman are doing a job, just like everyone else.

Posted By: R6CHWV (2:17pm 05-26-2008)
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Very Simply, there are two sides to every story!

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