CITIZEN POWER ALLIANCE

Advice to landowners

Gas leases are legal, binding documents, i.e., contracts. When entering into a lease agreement with a gas company, have the document reviewed by an attorney experienced in mineral rights issues.

Property owners generally have the right to explore and develop minerals under their property. Owners may lease the right to explore for gas to a company that has the equipment and expertise to recover or receive the gas for a period of time. The property owner may accept payment for the lease and royalties for the value of the gas. Public records, deeds, and real estate titles will indicate whether such rights have been leased, sold, or otherwise transferred.

Do not accept out of hand pre‐printed leases provided by gas companies, but rather use these as a starting point for negotiations. Retain the ability to negotiate for new terms when the lease is up.

There is no legal requirement forcing a landowner to sign a lease with a gas company; however, under New York State Environmental Conservation Law, compulsory integration is required when any owner in a spacing unit does not voluntarily integrate his/her interests with those of the unit operator. Compensation to compulsory integrated interests will be established by the DEC Commissioner ’s Order after a public hearing.

Be aware of the different types of lease payments: bonus, rental, royalties, and shut‐in royalties.

When entering into a lease, please make sure you know who you are dealing with. Verify the following:

Is the company registered as an operator with the DEC?
Has the company drilled any wells in New York?
Does the company have any violations on record in NYS or elsewhere?
How can the company and supervisor be contacted?
GasDrillingInfoSheet.pdf