The benefits and the risks of leasing your mineral rights - 21 News Now, More Local News for Youngstown, Ohio -

The benefits and the risks of leasing your mineral rights

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YOUNGSTOWN, Ohio - The shale boom has had Valley landowners cashing-in by leasing thousands upon thousands of acres in mineral rights over the past two years.

But what are the benefits and the risks of signing on the dotted line?

Some may call it a contract controversy that has already sparked several legal battles.

On October 19th, hundreds of angry landowners left a closed door meeting at Lakeview High School in Mercer County.

The group tells 21 News that they were informed that the oil and gas drilling leases they signed with Halcon Energy, through a middleman, were not going to be honored.

At the time, Wille Gatewood of Jackson Center said that he signed a lease with Halcon and he was paid nothing. Never receiving the signing bonus he says was agreed to in the contract.

Attorney Alan Wenger of the law firm Harrington, Hoppe and Mitchell says, "Many of the leases, or the lease transaction documents, are a bit misleading. If you read them carefully they allow the lessee to walk away from the deal if they don't like it after doing title work or just for any or no reason."

So before signing on the dotted line it's recommended that you first hire an attorney with experience in oil and gas contracts to review the documents.

Remember, signing doesn't mean the company has to drill. Don't take any verbal representations as fact, and beware of contract language you don't fully understand.

It's also recommended that if someone offers you a last chance deal, don't be desperate to sign.

"The landowners have the resource, and the drilling companies need them. So landowners do have some bargaining power, and over the last few years some of these landowner groups have harnessed that, and done a good job of benefiting the landowners," Attorney Wenger said.

Landowners are also urged to have water tests performed before any drilling occurs, not only on water wells, but streams and ponds on property where livestock may feed.

And remember, contract language should protect you from any liability as a property owner in the rare instance of an environmental hazard.

Obviously, the benefit is that there's lot of money to be made for the oil and gas companies, as well as landowners.

Attorney Wenger says, "Because of the advances in technology and productivity of these wells, there are millions of dollars at stake. And perhaps many dollars per acre, per month, year in and year out in royalties that has eclipsed anything that has happened before."

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