How to Lease Your Land

Thinking About Leasing Your Land? Be Proactive!

If you are a current landowner with property in the extensive area of the Marcellus Shale/Utica play, chances are you have heard about the leasing of mineral rights. Before making any important decisions regarding your land, there are several issues to consider:

  • If there is more than one family member who shares interest in your land and/or mineral rights, make sure to contact them and agree on how to best pursue this. If everyone is not in agreement, it could lead to problems once negotiations start.
  • It is important to contact your local Recorder of Deeds Office in the county in which you reside. Knowing exactly what type of deed you have and ownership to mineral rights on the land is a key component to the land leasing process.
  • Thoroughly research current wells and areas of interest in your area. Some key resources are your local State Regulatory Agency which oversees oil & gas activity within the State, local searches of current operators in your area and Public Records Offices for recent drilling permits in the area.
  • Gather all your paperwork in order. The more documents you have in relationship to your ownership and rights, the more prepared you will be in advance to address any questions or issues.
    Once you have exhausted all of your research efforts, it is time to think about negotiations. It is important that you maximize the benefits of your mineral ownership when contacted with an oil or gas leasing proposal. Missing available opportunities in the negotiations process can lead to less money in your pocket!
  • Know exactly who you are talking to. There are several different “types” of contacts who you may encounter.
  • A contract leasing agent/broker is usually an independent contractor working on behalf of the company who intends to drill. They often have incentives to negotiate the best deals for the companies that they – represent.
  • An oil company employee who is an “in house” landman pursuing local leases.
  • An entrepreneur or middleman. An individual may be working for their own account, leasing in their own name with the intention of re-selling to another company who has the intention to drill.

Be sure to Google all parties involved. This includes the person who initially contacted you, the name of the oil company, and any other individual or party involved in the leasing contract. Doing an Internet search can turn up a wealth of information that you can use to your benefit.
Research and preparation are the key to a profitable lease agreement. It can also be a benefit to seek prior legal advice. If seeking the advice of an attorney, it is important to be sure that the attorney is well-versed in local land leasing laws and has experience in the oil & gas industry. If you do seek legal advice, be sure to discuss fee schedules up front to save yourself any hidden costs down the road.