Lease Renewal

Oil and Gas Leasing Help
1

Hi,

I just received an offer to renew my lease in Cascade Township, Lycoming County, PA. We recently received notice that the gas company Anadarko applied for a permit to drill a horizontal well. The permit shows one of the horizontals crossing under our property. I have several questions.

  1. The permit shows three horizontals. Does this mean that the gas company will drill all three or is it optional depending on what landowners lease or not?

  2. If the horizontal does cross our land, does the gas company have to lease our land, i.e., giving us more negotiating power?

The sign-on bonus they are offering is significantly lower, $500 vs. $2,500 from our original lease. I know they will be drilling soon since they have already built a road and some infrastructure to get started.

Thanks for any help and all help.

2

From my understanding, all this should be specified in your lease agreement as a scenario. I know in mine, the lease through Cabot states that if a neighboring well is within 1 mile from our property line, then we are entitled to x amount of % due to the fact that that well is drilling possible natural gas chambers underneath our property; therefore, that gas is within our mineral rights. I don’t think that oil company necessarily has to lease your land and besides, you are already under contract. Ask your Leasing Company. I hope this helped.