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Friday, May 15, 2015

Another Ohio Landowner Threatened with Forced Pooling for Asking Questions About Lease Language

From Shale Play:
Bill Edge said brokers representing natural gas drillers are using a "pressure tactic" to get him to sign a contract with a market enhancement clause, which he believes will reduce the amount of royalty money he should receive. 
"I was not happy with the language in the leases," the Martins Ferry man said regarding contracts offered for parcels in both the Pultney and Colerain townships of Belmont County. "They said, 'If you don't do it, we'll just force pool you in.'" 
Unlike West Virginia, Ohio allows horizontal shale drillers to use forced pooling if they cannot acquire all leases needed for a new well site. Ohio Department of Natural Resources spokesman Eric Heis said the company doing so would have to pay the landowner a 12.5 percent royalty on gross oil and natural gas production, but would not need to pay any initial lease money on a per acre basis. 
"It is sad the way these brokers are treating people," Edge added. 
According to Pleasant View Management Ohio, a market enhancement clause protects the landowner from deductions being taken from royalty payments if the money does not "improve the price of gas."
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