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Protect your Mineral Rights: Oil and Gas Leases

I work with many clients to assist them with the estate planning and elder law issues relating to the mineral rights they own in certain real property throughout Pennsylvania and other states. The focus on the mineral rights ownership interest has increased exponentially as the Pennsylvania (PA) Marcellus Shale discoveries have broadened. Many people also refer to this as the “Pennsylvania Gold Rush.”

Tremendous wealth can result from the ownership of the mineral rights in a property containing large natural gas reserves. The wealth will only be realized after the mineral rights owner signs a lease with a natural gas company or with the government. The negotiation and structure of this oil and natural gas lease is the key to protecting the property owner and will help to insure a successful and lucrative transaction. Landowners should have legal representation during this negotiation and lease structuring period. Your future relationship with the natural gas company or government entity will be shaped in these beginning stages and many of your potential problems can be averted by having legal counsel. There are also hurdles to be considered and overcome that relate to the Pennsylvania Department Of Environmental Protection (PA DEP). Read the Marcellus Shale Page at the PA DEP website by clicking here.

Legal counsel will negotiate, among other legal concerns: 1. A lump sum “signing bonus,” 2. Amount and payment schedule of ongoing royalties, 3. Clauses to discourage the energy company from misusing or destroying the land (Read this article on point), 4. Receipt of free natural gas or oil products, 5. Payment to compensate for loss of property value as a result of mining/extraction.

Please contact me with any questions regarding the oil and gas lease preparation and negotiation process at either 610-933-8069 or at dkaune@utbf.com. Unruh, Turner, Burke & Frees, P.C. is a full service law firm serving clients in Chester, Montgomery, Delaware, Philadelphia, Berks and Bucks counties. The firm is capable of assisting you with all aspects of of the mineral rights leasing process for properties located throughout the State of Pennsylvania.

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