One question that often comes up is should a coalition use an attorney or gas leasing consultant? The answer is unequivocally YES! Because the lease is a legal contract between the landowner and gas company, it is absolutely essential that any gas lease be reviewed by a qualified attorney who has experience in gas leases. If you choose to use a qualified gas leasing consultant, ensure the consultant has an attorney as part of the consulting team.
In either case, be sure the attorney or consultant has experiences with gas leases and ask for references of other landowners or landowner coalitions they have developed leases for. Do your homework and contact their references to find out how the attorney or consultant worked out for the landowner coalition.
An important note – gas leasing law is a specialized field and laws and regulations pertaining to all facets of gas exploration varying considerably between states. Be sure whoever you choose to represent your coalition has experience in gas leasing matters for the state you live in.
While each landowner coalition will have specific needs to be met, here are some examples of questions to ask when selecting an attorney to help you develop your gas lease:
• How many years of experience do they have specifically in dealing with gas leasing?
• How many other landowner coalitions do they currently represent or have represented?
• How many gas leases have you developed and how many have been signed by a gas company?
• What was the signing bonus and royalty rate that resulted from the signed lease?
• What clauses do you include or exclude in your leases that offer protection for the landowner and the environment?
• How do they structure the leases – as a standard group lease or a lease with individual addendums or other formats?
• What experience do they have with compulsory integration?
• Besides a legal team, what other disciplines does their legal team have on staff (ex. Geologist, environmental scientist, pipeline specialist, accountant, etc)?
• Will the attorney and their team be willing to give educational presentations to your membership – this is important to help keep your membership informed and as a way to grow your membership.
• What type of services will the attorney provide to individual landowners who are members of your coalition – for specific issues the landowners may have with current leases or expired leases.
• What is their fee structure and when do they expect to be paid - flat rate, cost per acre, percentage of signing bonus or royalty rate, or any combination of these fee structures?
The costs for developing a lease with an attorney or consultant vary. The “going rate” in New York is $20/acre – regardless of the acreage. In some case a sliding scale would be applied (lower cost per acre for larger parcels). In other cases the attorney or consultant may ask for a percentage of royalties for parcels with successful wells.
Attorney costs are not typically incurred until after the lease has been signed and landowners have been paid. The attorney fee would paid using funds obtained from the signing bonus so there is no out of pocket expenses for landowners.
In general, there are enough attorneys and consultants who are willing to provide their services at a flat rate per acre fee structure as well as waiting until the lease has been signed before being compensated and this is the recommended structure that landowner coalitions should negotiate with their attorney.
One important thing to remember is the attorney or consultant works FOR the landowner coalition and not the other way around. The purpose of the attorney or the consultant is to advise the coalition. The landowner coalition is in a great position to negotiate the specific working relationship and benefits with the attorney or consultant.
There are a number of very good attorneys out there who already realize this fact and will work with you and your landowner coalition for a mutually rewarding partnership.
Attorneys Specializing in Natural Gas Leases
The following attorneys are listed here alphabetically and not in any specific order or preference. The list of firms presented here is for informational purposes only.
Christopher Denton 311 Lake Street Elmira, NY 14901 (607) 734-0661 fax (607) 734-0953 firstname.lastname@example.org