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QUESTIONS TO ASK A DRILLING COMPANY BEFORE YOU SIGN A GAS LEASE

 
1.  Ask your drilling company to put in writing that all of their employees and all of their sub-contractors employees have passed background checks and have no criminal record.  Remind them that you are concerned for your children's safety and protection of your home. 

Oil and Gas Lease

2. When the drilling company sends someone out to do your pre-drill water sampling ask for at least two weeks notice so you can have another water company of your choice (that you will pay) to be present to do a "split sample".  You will want to do the same in your post-drill sample.  Ask them what "EPA Method" they will be using so you can make arrangements with your testing facility. 

Major Leaseholds
- June 2011 -

Chesapeake Energy: 1.67 million acres

Range Resources: 1.2 million acres

ExxonMobil: 897,000 acres

National Fuel Gas: 745,000 acres

Consol Energy: 752,000 acres

Chevron: 714,000 acres

Royal Dutch Shell: 700,000 acres

EQT: 520,000 acres

Anadarko Petroleum: 355,000 acres

3. Ask for specifics on where their entry road will be, expected hours of use and volume of traffic.

4. Would they consider moving the road to the very edge of your property?  Express your concerns over the safety of your children playing in your yard, the constant noise and the fact that your property value will decrease.

5. Ask how they will control dust on the access roads on your property.  Do they intend to spray the roads?  Just so you know, in the State of PA, drillers are allowed to spray brine (frac fluid) on their construction roads to control dust.  They have to receive permission from the DEP once a year to spray.  No testing or monitoring is done.  This will eventually make it into groundwater.

6. Where do they plan to obtain the millions of gallons of water they will need to do the drilling and fracing?  On one local site the driller put on their permit application that they needed approx. 100,000 gallons for each drilling and approximately 6 million for each well frac.

7. Where do they intend to store these millions of gallons of water?  Are they planning a water impoundment?  Freshwater only, or also wastewater?  Since many of the drillers are now recycling water they use the wastewater impoundments.  This greatly decreases the fresh water requirements.  They just keep re-using the frac fluid.  How long will the impoundment sit on your property?

8. Do you have any water sources on the land, like springs, creeks or ponds?  Ask the driller to sample any of these, pre- and post-drill.  Ask for a split sample on these too.

9. During the frac and flare, will they consider putting your family in a hotel? Mention you have concerns over the VOC's that will be emitted from the flare.  These emissions are very toxic.

10. How long do they anticipate the following will take (ask for this in writing)

      -install the road
      -install the pad
      -install the impoundment
      -collect the water required
      -drilling
      -frac
      -flare
      -well completion (put on the well heads)
      -restoration

11. What does the driller do with the frac pit liner after the frac?  In PA, they are allowed to bury the liner 18 inches below the surface.  The liner may still have drilling materials in it.  They can leave in the remnants of any solids brought to the surface during the frac which could include radioactive materials. Photo below: Drilling pad pit getting buried.

12. Any plans for a compressor station or processing facility on your land or neighboring land?

13. Are you leasing rights to only Marcellus Shale, or all the other sources of natural gas and petroleum beneath your land too?  You can specify which geologic formations your lease covers. Someday, they may drill deeper to the Utica Shale, Trenton-Black River or another formation, once the Marcellus Shale gas runs out.

14. Lease term. You may sign a gas lease for 5 years, but your lease can he "held by production" and extended, even if they only move an excavator onto your land the last day of the lease.

15. Privacy lost. Once you have gas wells on your property, there may be daily truck traffic to the well sites by well keepers and unknown personnel. Specify in your lease where roads and wells will be located.

16. There is much more in "wet gas" from Marcellus Shale than just methane. Be sure your lease includes payment for other products like propane, butane, ethane and drip gas.

17. Expenses. Will the drilling company be deducting expenses from your royalty payments for things like drying, transportation and storage? Some royalty payments are being reduced by nearly half for expenses like these.
  

Impoundment dam and gas drilling sites

Additional Information:

A Landowners Guide to Hydraulic Fracturing
Addressing Environmental and Health Issues in Oil and Gas Leases

June 2011 HARVARD LAW SCHOOL - Online PDF

VIDEO: $500 million dollar lien on Ohioville resident's property

PDF from Chenango Greens:
Ask your Lawyer - Ask the Landman - Ask yourself
Get the answers BEFORE you sign a lease

 

 


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