Expert: Alan H. Coogan Date: 7/7/2008 Subject: Oil & Gas Lease
Question I live in Washington County Pa. in a residential area and this past weekend my husband and I were approached by a representative of a company that wants to lease the rights for oil and gas underneath our property. We were told that a well had been put in approx. 1/2 mile from our home and they will be drilling 6500 ft. down and 1.5 miles across underneath to our property. They want us to sign a 5 year lease agreement for the rights to any oil, gas, coalbed methane, coal seam gas, etc. We only have 0.612 acres and they will compensate us $300.00 plus the standard monthly royalties assoc. with our property size (I was told this would be approx. 75-150.00 /month). I am concerned about several issues including the possibility of mine subsidence to our property. My husband and I are very hesitant about signing this agreement since we do not know anything about this process. I did contact an attorney, but they want at least $350.00/ hour to look everything over and that seems like a lot of money considering we will only be compensated such a small amount from the company that wants to lease the gas rights. Any information that you may provide regarding this process would be greatly appreciated.
Thank You.
Answer Dear Lisa--a good question given the extensive lease grant. In general, collapse on a 0.6 acre parcel as the result of a 6 Inch hole is remote, but you are in a coal mining area known for collapse, ==check local planning commission, demand insurance protection. If you do not lease, they can drill next door and the danger is the same!
AHc
