If I join a coalition, does it commit me to signing their lease?
No, joining a coalition does not commit you to signing their lease. However, at some point prior to the lease bidding process, the steering committee will need to get an idea of who has intentions of signing the lease when the time comes. This is so that when your groups lease is sent out to bid, a fairly accurate number of acres can be given to the intersted energy companies. It would not be fair practice to tell an energy company that they are bidding on 10,000 acres and then only have landowners actually sign 4,000. In most cases, the steering committee will not ask for your intentions until you have had an opportunity to review the proposed lease.
What is a Landman?
A landman is an agent who works for a drilling company, or is contracted by a drilling company or broker. Their mission is to negotiate the lowest possible lease price and most advantageous terms for the oil/gas drilling company.
During a "play" hundreds of landmen may converge on an area to quickly close leases before landowners realize the value of their mineral assets.
When the landman comes, it is time to seek qualified legal oil/gas assistance. You may be signing a deal that is more valuable than the value of your property itself!
What is a pool or unit?
It is a term in gas and oil production and NY DEC. A pool or unit is the area from which and actual well would draw its gas or oil.
Think of it as an under ground pond. If 1/2 the pond of gas is below you and the other 1/2 is below your neighbor then, when a well is bored you and your neighbor would comprise the pool, or "production unit". You and your neighbor share the royalty money from the gas well 50/50.
What is the difference between a developmental, non-developmental and top lease?
Developmental: This is also called a surface rights lease, wherein the energy company would be allowed, within the parameters of the lease and the law, to come onto your property to operate. This includes, but is not limited to drilling, laying pipeline, building roads and putting up structures.
Non-Developmental: This is also called a non-surface rights lease, wherein the energy company can not come onto your property to do any kind of work. They can however, drill underneath your property in a horizontal well. Any pipeline, etc. that they may wish to use your property for would be negotiated seperatly should you wish to do so.
Top Lease: A top lease would only be applicable for landowners who currently have a gas lease on their property. They could potentially sign a lease through our coalition that would become effective the day after their current lease expires. Whether this would be possible or not is dependent on the terms and conditions of the current lease. If you are considering this, please contact your attorney or the coalition's attorney to review the terms of your current lease.
What is a sign on bonus:
A sign on bonus is a one time per acre fee that you would get for signing a gas lease with an energy company.
For example, if you have 100 acres and you sign for $750 per acre then you will get a check for $75000.00 dollars. It usually takes between 30-90 days after signing to receive your monies.
What is a royalty?
If you are in a unit of a well that produces gas you will get monthly royalty payments based on a % of the wells production. The minimum you can be paid in NYS is 12.5%. However you will share the percentage with other landowners within the unit. For example, if you are in a unit that is 40 acres, and you have 10 of the acres in that unit then you would receive 25% of the 12.5% royalties.