www.charlesjeromeware.com. " We are here to make a difference."
(The contents of this blog are not intended to be legal advice, nor should be interpreted as such.)
GAS (and probably some oil) LEASING IS COMING TO MARYLAND, especially Western Maryland. The " Marcellus shale" gas deposits in Maryland's Garrett County are expected to have production capacity similar (hopefully) to the capacities expected in the " Eagleford shale plays" in South Texas and some other "shale plays" in other areas around the U.S.
In our experience, the key to a successful relationship as an oil and/or gas owner(lessor) with a lessee (company driller) is an understanding of the oil and gas lease agreement. Certainly while understanding your oil and gas lease can take some work, the general contractual concepts and principles can be understood by almost anyone. Let me be clear: the oil and gas lease is, in fact, a contract; even though it is, for sure, a very specialized type of contract.
Like any contract of importance, the oil and gas lease must be read very closely and understood.
Many oil and gas leases are fairly straightforward; others are not. Understanding certain key sections depend upon your comprehension of the "industry terms" used .in the oil and gas business. learning and understanding these terms is crucial, but certainly not too difficult. The bottom line is that when you come to realize that the oil and gas lease is your friend(or ally) and not your enemy, you are well on your way to properly protecting your legal rights as the property owner.
In Maryland, for example, oil and gas industry officials predict that as many as 1,600 wells could be drilled on 128,000 acres of land already leased Western Maryland's Garrett County, and 637 wells could be drilled and sunk on 51,000 drillable acres in nearby Allegany County [source: Maryland Dept. of the Environment, which regulates drilling in Maryland].
All parties to these leases should remember and consider that everyone affected by the drillings, including the involved communities, must be protected. Contaminated streams and other harm to the environment must be avoided, and the residents of these generally economically-depressed mountain regions must not be short-changed financially. Well-crafted leases can help avoid these negative results.
To be sure, leasing your mineral rights (estate), whether it is oil, gas or underground minerals, can be profitable, assuming care is taken to negotiate the lease and protect the land from long-term liability and damage.
At the very least, all of the following provisions should be covered in the lease : liability, water rights and water protection, "pooling" and unitization, assignment of rights,liens, underground storage rights, termination, reclamation and decommissioning, condemnation, and other relevant issues (miscellaneous).
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