Landowners who want to escape expiring gas lease

Many NY gas leases expire as moratorium remains

The Associated PressBy The Associated Press  Follow on Twitter  on May 13, 2013 at 1:49 PM, updated May 13, 2013 at 2:04 PM
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SYRACUSE, N.Y. (AP) — New York’s five-year moratorium on shale gas development promised to be a blessing for many landowners eager to end leases they signed before anyone outside of the oil and gas industry had heard of fracking.

But actually getting out of a lease can be tricky. Many have clauses giving the drilling company the right to extend them for another five years. Gas companies have tried to extend thousands of leases by claiming an unforeseen barrier — the moratorium — has prevented them from drilling. And even when a lease has expired, landowners often have to take several legal steps to clear their land of claims.

Thousands of leases have reached the end of their five-year term since the moratorium began in 2008. That gives some landowners the chance to get out of a lease they signed for $2 or $3 an acre and 12.5 percent royalties and try to negotiate a new one for the far more favorable terms seen in recent years — potentially thousands of dollars an acre and 20 percent royalties.

Other landowners simply want to end their leases to free their farms from fracking, which uses huge quantities of chemically treated water and sand to crack shale thousands of feet underground so trapped natural gas can flow into horizontally drilled wells.

Ellen Harrison, of the Tompkins County town of Caroline, started an organization called Fleased to help landowners navigate the complex legal issues related to gas leases. She regrets having signed a lease with a gas company and is now firmly in the anti-fracking camp, which raises health and environmental concerns about gas drilling and has been pushing Gov. Andrew Cuomo to make the moratorium permanent.

Cuomo has said there’s no set timetable for his decision.

“In New York, your lease doesn’t just end when the five years are up,” said Joe Heath, a Syracuse civil rights lawyer who partners with Harrison in lease-termination workshops and offers his services for free to people trying to end gas leases. “The law says when the lease expires, the company must provide the landowner a document, but they often don’t. The lease stays there until the landowner takes action.”

The landowner has to send letters to the gas company and all investors that have bought interests in the lease; if none of them file an affidavit to extend the lease within 30 days, the landowner can file a document with the county clerk ending the lease. One upstate landowner had to notify eight companies to end his lease at the end of its 10-year term.

“These leases are commodities that they have to sell,” Heath said. “Companies are desperate to extend these cheap old leases so they can sell them. They use every extension clause they can.”

Heath said he has successfully gotten landowners out of a “couple hundred” leases in the past two years.

“Hundreds of millions, if not billions, of dollars are at stake if these operators can hold onto these leases which have very favorable terms for them,” said attorney Robert Jones, who has represented hundreds of landowners in lawsuits challenging efforts by Chesapeake Energy and other companies to extend leases.

A federal judge ruled against Oklahoma City-based Chesapeake and Denver-based Inflection Energy in November, saying that even though the state doesn’t allow fracking, nothing stopped the companies from using conventional drilling methods. The companies have appealed.

In a separate case, Attorney General Eric Schneiderman reached an agreement with Chesapeake last June to allow more than 4,400 landowners whose leases were expiring to renegotiate terms with other companies, which Chesapeake could match. The trouble with that, Heath said, is that no companies are interested, given New York’s uncertain regulatory future.

Albany lawyer Tom West, who represents Chesapeake and other companies trying to extend leases, said it’s only fair that companies should be given time to do the gas exploration they agreed to in their leases.

“I’m certainly sympathetic to landowners who think their leases shouldn’t be extended,” West said. “But the operators’ perspective is, we just want the amount of time that we’ve been delayed tacked onto the lease. It’s a deal they feel they bargained for, and they should have the opportunity to come in and test the resource when the moratorium is lifted.”

Most of the landowners who come to lawyers like Jones and Scott Kurkoski, who work for different firms in Binghamton, hope to negotiate new leases with better financial terms and more protection for their land and the environment.

“Some people are happy that their lease has expired, but unfortunately, there really isn’t any lucrative deal out there for them,” said Kurkoski, who represents the 77,000-member Joint Landowners Coalition of New York, which is seeking leases on nearly a million acres of upstate New York land that haven’t been leased before.

Two-thirds of the leases people bring to Heath can’t be terminated because they have clauses allowing the company to extend them, he said.

Are you leased or Fleased?
The following video is a powerful explanation to potential and existing gas drilling leaseholders.  If you are a landowner you should watch this video in its entirety and get in touch with FLEASED.org. Scroll down to find instructions about contacting and working with Fleased (a play on the word “fleeced”), along with a letter  “Have You Been Leased or Fleased?”(immediately below the video) by Ellen Anderson, published in the Norwich, NY Evening Sun giving her reactions to the presentatiion.
We offer this video of a presentation/workshop held in Norwich, NY, courtesy of Concerned Residents of Oxford

Have You Been Leased or Fleased?
On March 14th I attended the Fleased Forum in Norwich.  Everyone who has a gas lease should have been there to become better informed, whether or not you want to get out of your lease. What an eye opening experience for the many dozens of Chenango County landowners who attended!  The two speakers were Ellen Harrison, a retired Cornell Geology professor, and Joseph Heath, an attorney from Syracuse.  Heath is one of the best informed legal experts on gas leases in the state.We were reminded of the old saying “be careful what you wish for”.  That should be a warning for landowners who signed gas leases, especially those who were blinded by the signing bonus, “free” money that ranged from $20 to more than $8,000 per acre, and the promise of lottery-winner royalties for years to come. Too often landowners have minimal understanding of the legal intricacies of the contractual agreement, which is full of fine print and invariably favors the gas corporation. The seasoned corporate attorneys write leases with so many technical provisions that landowners often cannot even cancel them after they expire.To their dismay, property owners discover that they have to file a cancellation notice with the county clerk and must notify not only the leasing gas company but all “assignments” – that is, all the other companies that have bought up all or parts of their lease.  The gas industry is not required to notify a lease holder when it makes such assignments.  The burden of research falls upon the landowners to find out ALL of the lease owners, and they often learn that there are multiple and sometimes elusive “assigned” owners.Meanwhile, the design of the leases makes it easy for the gas company to renew the lease.  It has only to send another payment as originally agreed in the contract. To force all landowners on a spacing unit to renew their leases, the company needs only to claim that they have started a work project.  “Starting a work project” can consist of an act as simple as parking a bulldozer on a cleared area anywhere on the 640 acre spacing unit. One spacing unit can consist of many properties.  That means all of those people who have been compulsorily integrated are forced into renewed leases as well.  Oh, and when the well has gone dry, the industry can store tons of pressurized gas in it without the various landowners’ consent or knowledge.  That has been written into leases as well.What about those royalties that were going to transform property owners from struggling tax payers into millionaires? Many land owners may learn that their best chance for seeing that financial windfall is never.  There are no profits until ALL of the costs of drilling the well and processing the product have been met.  Who decides that?  The gas company. So it can easily make a case for showing no profit.Especially right now.  In the present market there is already no profit in the sale of gas. In fact, it costs more to produce than the companies make from selling it. Since they have to keep drilling to fulfill the conditions of the leases and maintain them, there is a huge glut of gas on the market so profits are impossible. Since holding the leases is essential for the dim prospect of future profits, gas companies have to keep drilling in a negative market to retain leases, to convince more people to sign leases and to persuade reluctant Wall Street investors to keep pumping up the bubble.As a result, gas companies have learned to profit not by selling gas, but by becoming financial speculators.  They bundle leases (like subprime home mortgages!) and sell them on the market for far more than they pay property owners – without the knowledge of the lease holders. A company can sell parts of your lease to many buyers so that the varied, mysterious strings attached to a lease make it extremely difficult for landowners to extricate themselves.

 

Who buys these bundled leases? Foreign countries that pay much more for gas overseas than we do. Gas companies that paid 15 billion dollars for a bundle of leases last year may have sold them for 17 billion dollars in the commodities market. But the corporate gas and oil attorneys designed contracts to ensure that not a penny of that two billion dollar profit flows back to the actual landowners.

 

Bernie Madoff is spending his life in prison for managing a Ponzi scheme which he could have maintained for decades more if it hadn’t collapsed when Madoff reached the tipping point and couldn’t pay the bills. According to some market analysts, the gas companies have already reached that tipping point.  The Ponzi scheme is failing because the awful truth is dawning upon investors in bundled leases.  It costs too much to drill without profit and they cannot continue to throw good money after bad to maintain continuous sales of gas leases indefinitely.  So investors are bailing out.

 

This why Norse Energy is in Chapter 7 bankruptcy and liquidating its assets, and why Chesapeake Energy is 19 billion dollars in debt and has sold half of the company to a Chinese corporation. These two companies own leases on 70% of the land in the Town of Oxford.  My neighbors have no idea which and how many speculators will own their leases tomorrow.

 

When the schemes inevitably implode, communities are left behind with contaminated aquifers, increased cancer rates, devastated landscapes, dashed hopes and dreams, and a huge expulsion of methane gas in the atmosphere, further pushing global warming to its irreversible tipping point.

 

And when gas companies destroy the value of people’s properties and make people sick, they don’t have to worry because proving that they are responsible for your problems is next to impossible.  It is financially cost prohibitive for an ordinary property owner to take a giant corporation to court.  So gas companies don’t have to take responsibility for anything.

 

Now you can understand why banks are becoming more reluctant to grant mortgages on properties that have leases attached to them.  If a lender has to foreclose on a property, it is stuck with an ongoing entanglement with many gas industry players, property that may be polluted, and old wells with unknown liabilities.  That also makes it difficult for a person who has a lease to EVER sell their property to anyone.  Obviously, for similar reasons, insurance companies are reluctant to renew policies on or near leased properties.

 

NEVER sell your mineral rights beneath your property to a gas company.  It becomes a permanent deed—as distinct from a lease- and you may never be able to sell your surface property because of it.

 

For you who have signed leases, and for those of you who dream of doing so, seek a specialist attorney’s advice.  If you wish to terminate your lease, go to Fleased.org because these good folks are a great source of information and advice.  You will also benefit from “Cautionary Advice for Landowners” http://www.oxfordvisionaries.org/cautionary-advice-for-landowners

 

Ellen Anderson

Oxford

The website is Fleased.org.

INSTRUCTIONS FOR LANDOWNERS WHO RECEIVED A LETTER FROM CHESAPEAKE AFTER NOVEMBER 15, 2012, CLAIMING LEASE EXTENSIONS DUE TO JUNE 2012 AGREEMENT WITH NYS ATTORNEY GENERAL:

Posted on March 2, 2013 by fleasedny

Many landowners have received certified letters from Chesapeake after November of last year.   All these letters have identical text, but slightly different dates.  A sample of this letter is included as part of this packet.

These letters make invalid claims that Chesapeake’s “interest in your Lease shall not terminate until December 31, 2013, . . . in accordance with the AOD.”  This reference is to the June 12, 2012 Agreement between Chesapeake and the Office of the NY state Attorney General (AG), to settle an investigation into deceptive leasing practices.  This Agreement, also known as an Assurance of Discontinuance or AOD, does NOT give the company any right to extend your lease’s primary term, if it has already expired.

These letters also make another invalid claim, in the 4th paragraph, which begins:“During the time that your Lease is extended on the grounds of force majeure arising out of the SGEIS process . . . .”  Chesapeake’s claim of force majeure extension of other gas leases was unequivocally rejected by the federal court in Binghamton, on November 15, 2012, in the Aukema decision; and this claim of force majeure extension was drafted before that decision and is no longer valid.

Fleased, working with an experienced gas lease attorney, has developed a method for challenging the invalid lease extension claims in these letters: We are prepared to assist landowners in filing consumer fraud complaints with the AG’s office.  Chesapeake’s response to such a complaint has been to agree to termination of the lease.

In order to assist you in this process, we need:
     1. A copy of your lease
     2. A copy of all correspondence with Chesapeake (Here is a sample)
     3. A copy of the consumer fraud complaint form for the AG  filled in to extentpossible and signed. (A template to assist you is provided.)

 Send these items to Fleased as soon as possible.

You can send them to fleasedNY@gmail.com, but if you cannot get them online then sending a hard copy is acceptable. Please mail to Ellen Harrison, Fleased, 2050 Ellis Hollow Road, Ithaca, NY 14850.

By signing the form you are agreeing that Fleased and Attorney Joe Heath can make the complaint on your behalf to the Office of the AG. Upon receipt of these materials, we will work with the attorney to file the complaint on your behalf and send you a copy of the final complaint package.

It is our anticipation that either Chesapeake will continue to agree to file a release of lease for each complaint filed, or that the AG will understand that this is a widespread problem, amounting to a deceptive business practice, that needs a more comprehensive agreement with the company.

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Informational Forum on Gas Lease Issues to Take Place on March 14th in Norwich

Posted on February 25, 2013 by fleasedny

Oxford, NY—Concerned Residents of Oxford is holding FLEASED FORUM/Chenango County, an informational forum for Chenango County landowners regarding gas lease issues. Landowners in neighboring counties are also invited to attend. The forum will take place on Thursday, March 14th, 6:30 pm, at United Church of Christ, 11 West Main Street, in Norwich. The event is free and open to the public. Note on parking: Please park on street, in public parking lots, or in County Office Building lots, not in Church parking lot.

Geologist Ellen Harrison and Attorney Joseph Heath, of Fleased.org, will present information on landowner’s rights concerning a range of topics including: the implications of gas leases on insurance coverage, property uses, and mortgages; whether it is possible to sign a “good lease”; how Norse’s Chapter 11 bankruptcy filing affects the leases that they currently hold; lease assignments such as overriding royalty interests and reciprocal capacity agreements and how they impact current leases; and what the recent force majeure decision in Binghamton means for expired or soon-to-expire leases in Chenango County.

Landowners wishing to terminate their gas leases will hear what they need to do to officially cancel a lease at the end of the primary term. Clearing the land records usually falls to the landowner. Landowners who are not in active gas leases are cautioned to check their deed papers to verify if there was ever a gas lease on their property. Even a decades-old lease remains a liability for the current landowner if not properly released by the gas company and filed as such with the County Clerk’s office. Forum attendees will hear what steps can be taken by a landowner in this situation.

Following their presentations, Harrison and Heath will take questions from the audience.

For further information contact: Concerned Residents of Oxford, PO Box 631, Oxford, NY 13830

email: concernedresidentsofoxford@gmail.com

tel: 607.226.6483 (Mina Takahashi)

FLEASED FORUM/Chenango County is organized by Concerned Residents of Oxford, and co-sponsored with CDOG and C-CARE.

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Has your lease been released?

Posted on February 2, 2013 by fleasedny

Over the past few months, some gas companies have begun to relinquish expired leases. To determine whether a gas company has filed a release notice for your lease, visit your county clerk’s office and ask for assistance in navigating their records.  Record systems often vary between counties. For example:

  • If you live in Tompkins County, you must search for your name and property in the electronic database at the County Clerk’s Office. Then select your Oil and Gas Lease record. When that comes up, you will see a button titled “View Notifications” on the lower right.  Click on that and it will list notifications that have been filed such as whether your lease has been assigned, released, etc. Click on the notification you are interested in and the information will come up.
  • If you live in Cortland County, you can access all of your records online by visiting http://www.searchiqs.com/ and clicking on “Cortland County.”  The most efficient way to find all documents pertaining to your lease is to search by your name (Last First). If you click on your lease record, you will find links to related documents (including releases) at the bottom of the right sidebar (under the subtitle, “Related”).
  • If you live in Broome County, you can access your records online athttp://gobcclerk.com/ and click Document Search. You can purchase and print copies from here, or simply find the reference number and bring it to the county clerk’s office.

As always, if you have any questions or would like assistance, feel free to contact us at fleasedNY@gmail.com.

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Promised Land: not just a movie.

Posted on January 13, 2013 by fleasedny

Gus Van Sant’s Promised Land accurately portrays the way landmen mislead people into signing gas leases.

Fleased is an organization intent on providing a voice for fellow landholders who leased mineral rights before we knew that shale gas exploitation threatened our land, air, water, and communities. Fleased supports real people who live with the aftermath of the manipulation and misleadings of landmen represented in this film.

If you plan on seeing the Promised Land, how about handing out some Fleased brochures after the movie?

Click here for a black and white version, or here for the color copy, and provide an opportunity for landholders to find support. Let us know how it goes atFleasedNY@gmail.com, and please contact Ren at Renostry1@gmail.com with any questions!

Enjoy the film!

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Send in your comments to the DEC this week

Posted on January 4, 2013 by fleasedny

 

We have made it really simple to submit comments. Click here to find letters to send to the DEC, each of which focuses on a different section of the regulations as well as an explanation of why the whole process is unacceptable. You simply need to print them out, add your name and address, and mail them in (DEC address is on the letter).

Do you have family and friends who are well-intentioned but unlikely to take action?  Get their permission and send in letters with their names and addresses.  Having comments come from different areas of the state is a great way to show our people-power to the DEC and Governor Cuomo.

Background: For years now, New Yorkers have been taking action to tell Governor Cuomo and the Department of Environmental Conservation that fracking is bad for our health, our land, and our communities. But the DEC has recently published proposed revised fracking regulations illegally, prior to the completion of the dSGEIS and the health impact review.

Not only is the DEC’s process backwards, but the proposed revised regulations are far from acceptable. The DEC has failed to take seriously most of the thousands of comments received on the initial proposed regulations put forward in the fall of 2011.

The number of comments rather than the details of what the comments say is critical.  Experts are making the necessary detailed comments, and our job is to wow the DEC, the Governor and the media with a huge number of comments.  The comment period ends January 11, so we need to act fast.  The clock is ticking.

Thank you for joining us in protecting New York State. When you finish sending in your comment, be sure to sign up for a bus to Albany on January 9! Governor Cuomo will be delivering his State of the State address, and hundreds of New Yorkers will present the DEC with the thousands of comments we’ve collected! Learn more and sign up here.

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Upcoming Public Information Session, Mon Dec 17th

Posted on December 10, 2012 by fleasedny
Announcing:

A Public Information Session on

“Responding to New Fracking Regulations”

 

Monday, December 17 at 7:00 – 8:30 pm

Unitarian Church of Ithaca

306 North Aurora Street, Ithaca

 

Are you confused about what the NY State DEC is doing about fracking?  Do you wonder what changes have been made in the recently released New Proposed Regulations on shale gas drilling?  Would you like to send your comments to the DEC but aren’t sure about the technical issues and don’t have time to do the research?  Then this is the event to attend.

 

A panel of speakers will describe

  •  why the new proposed regulations are important
  •  the issues they cover and the issues they ignore
  •  how to frame your concerns most effectively in comments to the DEC

 

Two of the speakers on the panel will be Dr. Tony Ingraffea and Helen Slottje.

 

The time period for public comments (at this point) is only 30 days, starting on Tuesday, Dec. 12 and ending on Friday, Jan. 11, 2013.   The new regulations themselves can be found at the DEC website at

http://www.dec.ny.gov/regulations/77353.html

 

Your voice matters.  We are fortunate in NY that the public has a right to speak up about shale gas regulations, and that laws require the DEC to read your written comments.  Please use your voice.

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Understanding and acting on the Nov. 15th ruling regarding force majeure claims

Posted on December 9, 2012 by fleasedny

In the past few weeks, we have been trying to learn more about the the ramifications of the November 15th US District Court ruling that force majeure does not extend leases. We are very grateful to attorney Joe Heath for providing the following interpretation and guidance.  If you undertake the lease termination procedures described below, please let us know whether or not you are successful by contacting Ellen at fleasedny@gmail.com or 607-539-7133. Learning about the outcome of your efforts will help us to better serve other fleased landholders.

————————-

An important federal court decision was handed down on November 15, 2012, in a Binghamton case, that impacts and essentially ends the NYS gas leases that were claimed to be extended due to force majeure.  This applies about 25 % of all New York gas leases.

 

The purpose of this posting is to explain this decision, to identify those lease-holders who can benefit from it, and to give instructions as to how to take actions to end those leases that are covered by this decision.  If you are a property owner with a lease that is covered by this decision, you must take action to officially have your lease cancelled.

 

In a case entitled Aukema, et al. vs. Chesapeake, et al. (Docket No. 3:11-cv-00489), Judge David Hurd ruled against Chesapeake’s claim that it could indefinitely extend leases beyond their primary terms, due to the state’s regulatory delays inherent in its environmental review of high-volume, slick-water horizontal hydraulic fracturing (fracking).

 

Chesapeake had claimed that force majeure entitled it to these extensions.  In this carefully reasoned decision, Chesapeake’s claim was rejected: “Accordingly, force majeure does not extend the leases.”  These leases had not been renewed according to the terms in the leases, and force majeure was ruled not to be valid.  Thus, all of the leases involved were declared “expired by their terms.”

 

The breadth of this ruling makes it clear that the lease for any property owner that is under the same circumstances is no longer valid.  It is not necessary to go to court to clear property title, but action must be taken to file a termination with the county clerk.  Gas companies are supposed to file such terminations, but seldom do.  When they do not file a release, property owners can follow the instruction below to secure official cancellation of their leases.

 

The first step is to review your lease and determine whether or not it has an automatic extension paragraph.  To find this–most leases begin with a long paragraph entitled: “LEASING CLAUSE”, which lists all the activities the gas companies obtained with the lease, such as drilling gas well, taking water, storage of gas, etc.  This is usually followed by a “DESCRIPTION” section, which merely defines the dimensions of your property that was leased.

 

Next comes the “LEASE TERM” paragraph, which normally is for a 5 or 10 year primary term, and which may even contain a specific date when this primary term ends, unless a well has been drilled or similar activities have taken place by the company on your land.

 

Unfortunately, in about 2/3 of the New York leases, this primary term and the termination date are very misleading, due to the next paragraph, which is entitled:  “EXTENSION OF TERM OPTION”, in which the companies reserve the right to extend the lease for another 5 or 10 years, at their sole option, with a specified payment, sent before the primary term ends.  If the clause states that the company can extend by “tendering” a check, then regardless of whether the check is cashed, the company can exercise the option and extend the lease for the specified duration.

 

You are in the position to take advantage of this new court ruling and take action to end your lease, if:

1. this “extension” paragraph was crossed off in your lease, and the original end date, as stated in the “Lease Term” clause has passed, OR

2. the extension payment was not tendered as required, OR

3. the extension was properly exercised, but has ended.

If you have any questions about the contents of your lease and whether these conditions apply to you, please scan a copy of the lease and any correspondence from the gas company and e-mail it to Fleased (fleasedny@gmail.com) and we will have it reviewed and answer your questions.

 

Here is what you can do:

i)      Go to the county clerk’s office, and:

(a)  Ask for assistance to see whether your lease has been released by the gas company; and

(b)  Find out if your lease has been assigned to any other company or individual.

ii)    If your lease has not been released, follow the procedures in the Lease Termination packet on the Fleased website (http://fleased.files.wordpress.com/2012/11/lease-termination-packet-11-20-12.pdf) on how to terminate an expired lease, pursuant to New York’s General Obligations Law § 15-304 (2),

(a)  This involves sending a notice to the company holding your lease, and to all other companies or parties to which any portion of your lease has been assigned;

(b)  You will not have been notified of any such assignments and so, you will need to check the records in your county clerk’s office to discover all such assignments, as your notice letters must be sent to these assignees as well;

(c)  If the company and the assignees fail to respond to these notice letters within 30 days, you can then file copies of the notice letters and affidavits of service in the clerk’s office, and

(d)  This filing officially ends your lease and clears your title.

 

Forms and instructions for these notice letters are found on the Fleased web site, as well as forms for the Affidavit of Service, which must also be filled out and signed before a Notary Public.

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More Information about November 15th Ruling on Force Majeure

Posted on November 21, 2012 by fleasedny

We’ve received some requests for more information about the ramifications of theNovember 15th US District Court ruling that force majeure does not extend leases. We encourage you to work with experienced oil and gas lease attorneys to interpret your specific lease terms and determine whether this ruling affects you.  This is what we’ve learned so far from the experts:

 

Many leases have a 5-year primary term with a clause allowing the gas company to extend the lease for another 5 years by simply tendering (writing) a check before the first term expires.  The renewal language is usually quite limited and the gas company must “tender payment before the primary terms ends.” Some companies sent landholders (lessors) force majeure letters claiming that the lease was extended but did not send checks to extend the lease.  Even with an auto extension clause, if the company has not mailed the extension check within the primary term, that lease has now expired.  The companies might claim otherwise, but they would be wrong.  They can’t make up an invalid legal theory, like force majeure, and rely on that to extend their leases.   Such a claim will not hold up in court.

 

A land owner whose lease has expired should thus proceed to follow General Obligations law 15-304 to clear their title for their expired lease.  Information on how to make such a filing can be found at: http://fleased.files.wordpress.com/2012/11/lease-termination-packet-11-20-12.pdf

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November 15, 2012 – Ruling throws out force majeure claims

Posted on November 18, 2012 by fleasedny

The US District Court, Northern District, found that force majeure does not extend leases.  The claim by gas companies that leases were extended due to the on-going NYS drafting of a Supplemental Generic Environmental Impact Statement (SGEIS) regarding High volume horizontal hydraulic fracturing was challenged in a case filed in April 2011 by more than 50 Southern Tier landowners. Those landowners had leases with Chesapeake that would have expired, but which Chesapeake claimed were extended due to force majeure.

This ruling is a major victory for landowners and against Chesapeake and the other gas drilling companies, because it now lifts the cloud off thousands of leases in NY, whose primary terms have expired, but which the companies had claimed to extend.   These extension claims were clearly and unequivocally denied.

The court ruling clearly rejected Chesapeake’s claim and declared those leases expired.  The full ruling can be found at: http://www.scribd.com/doc/113409103/Aukema-Decision-101512

Northern District of NY (Case 3:11-cv-00489-DNH-ATB Document 78)

 

Quoting from the decision:

CONCLUSION

“The leases terminated at the conclusion of their primary terms, and defendants cannot invoke force majeure, the doctrine of frustration of purpose, nor the prescribed payments clause to extend the leases. …” ( p. 22.)

Therefore, it is ORDERED that:  “All of the leases are declared expired by their terms; and defendants [Chesapeake and other gas drilling companies] cannot invoke force majeure, the doctrine of frustration of purpose not the prescribed payments clause to extend the leases.”  and:  “Pursuant to New York General Obligations Law section 15–304, the judgment in this case shall be considered ‘a document in recordable form cancelling the leases as of record in the county where the leased land[s are] situated’ and may be filed in the appropriate court and/or county clerk’s office.”  (p. 23.)

 

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Change in Ownership of Leased Property

Posted on October 14, 2012 by fleasedny

When a property with a gas lease changes owners, the new owner must send the gas company a copy of the deed with the name and mailing address for the new owner.  This is required in most leases and is necessary so that any correspondence and/or payments from the company will go to the new owner and not to the previous owner.

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Contacting Your Town Board

Posted on August 7, 2012 by fleasedny
It is critical to let your local officials know of your plight as a landowner with a gas lease. Short of a state ban, a local moratorium or ban will be our only protection from the impacts gas exploitation will have on those of us with gas leases.  Pro-drilling forces are pushing towns to enact resolutions favoring drilling.  It is imperative that towns hear from citizens like you.

We have prepared some materials to make it easier for you to reach out and educate your local officials.  A Town Board Packet is provided that includes a template letter, educational resources, and contact information. Visit our Resources page for additional information.

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Agreement between NY State Office of the Attorney General (OAG) and Chesapeake Appalachia, June 12, 2012

Posted on June 27, 2012 by fleasedny

Full text of the agreement and explanatory summary are posted here.

Landholders should talk with an experienced gas lease attorney to assess the implications of the agreement to their particular situation.

The agreement is very limited.  It releases only 50 leases.  The agreement provides scant relief for a limited number of additional leases  (6,230).

The agreement addresses only Chesapeake leases in NYS that the company claims to be extended by force majeure and by the company’s taking advantage of the “automatic extension” clauses in leases.  Unfortunately the agreement does not invalidate force majeure claims that are based on the on-going NYS Environmental Review; the OAG took no position on such claims. It is up to Chesapeake whether it will continue to assert such force majeure claims for leases that otherwise would expire before Dec. 31, 2013.

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Posted on June 27, 2012 by fleasedny

Second Thoughts About Your Gas Lease?

What You Can Do

Monday, July 2nd

7:00 PM

Windsor Community House

107 Main Street, Windsor, NY 13865

Join Joseph Heath, General Counsel for the Onondaga Nation, and Ellen Harrison, founder and director of Fleased, for an educational presentation on the pitfalls of gas leases and the process of lease termination.

Suggested $2 donation to go towards the cost of the venue and travel expenses.

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NYS AG agreement regarding Chesapeake leases announced on June 14, 2012

Posted on June 16, 2012 by fleasedny

Careful reading of this agreement is needed to understand to whom it applies and what remedies are available.  Fleased is hoping to get a copy of the full agreement and to have some legal interpretation of its application to lessors.  Meanwhile, here is a link to the press release that was issued by the Office of the Attorney General:

http://www.ag.ny.gov/press-release/ag-schneiderman-announces-landmark-agreement-chesapeake-appalachia-allow-landowners

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May 23: Educational Public Forum in Candor

Posted on May 14, 2012 by fleasedny

“Second Thoughts About Your Gas Lease?

What You Can Do”

Presentation in Candor May 23

What: Educational public forum on getting out of a gas lease

When: Wednesday, May 23, 7 p.m.

Where: Candor Fire Hall, 74 Owego Road (Rte. 96B), across from church and Town Hall

Who: Ellen Harrison, founder and director of Fleased, and attorney Joe Heath

When you signed the lease, you probably had no idea that it would be so vastly different from your grandpa’s gas lease, or your dad’s. That’s exactly what happened to Ellen Harrison.

“I had no idea about fracking,” recalls Harrison. “If I had known then what I know now about the dangers of this unconventional process, I never would have signed a lease.”

Like many others, Harrison felt that she had been duped by the landman. To learn more about how she could remedy the situation, Harrison formed the advocacy organization FLEASED. It brings together people who wish they hadn’t signed and who felt they’d been grossly misled by the gas fracking companies.

At this event she will share information that she and other Fleased members have learned during the last several years.

Also presenting will be environmental attorney Joe Heath, who is also general counsel for the Onondaga Nation. He will discuss lease termination and how to clear your title if your lease has terminated but the gas company has not yet filed papers with the county clerk clearing it.

“This is a great opportunity for those who feel trapped in an uncomfortable or frightening situation,” said Spencer resident Maura Stephens, a member of the sponsoring organizations, “to learn what options they might have to change their circumstances and protect their property and their future health and well-being.”

Cosponsored by RAFT and SAVE S-VE, the event is free and open to the public. Suggested donation for industry and regulators: $100. Contact Maura Stephens, maura@maurastephens.com, for more info.

Directions.

From Owego and points south: North on Rt .96, and  continue on 96B (now the 96 detour). Pass a cemetery on right. Candor Fire Hall is on the left across from a church and Town Hall.

From Ithaca, Danby, and points north: South on Rte. 96B past the Dandy Mart & HiWay Dairy Bar. Candor Fire Hall is on the right just past Pucky Huddle (Quilt Shop). If you get to the cemetery you’ve gone too far.

From Spencer-Van Etten and points west: East on 96. In Candor, take detour left over Mill St. to the stop sign. Right on Rt. 96 B. Pass the HiWay Dairy Bar on left. You’ll see the Pucky Huddle (Quilt Shop) on the right; Candor Fire Hall is just past it on the right. If you get to the cemetery you’ve gone too far.

 

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Thursday May 17th – Gas Pipelines: What Municipalities Need to Know

Posted on May 5, 2012 by fleasedny

Tompkins County Council Of Governments and Cornell Cooperative Extension Tompkins County present:

Gas Pipelines: What Municipalities Need to Know

WHEN: Thursday, May 17, from 5:00 to 7:00 p.m.

WHERE: Borg Warner Room, Tompkins County Library, 101 E. Green St., Ithaca, NY

COST: Free and open to the public

Twenty interstate natural gas pipeline systems crisscross the region from West Virginia to Maine. As gas drilling operations expand, thousands of miles of new pipelines will be needed to connect existing pipelines to gas wells.

For more information see http://ccetompkins.org/calendar/12/04/25/gas-pipeline-forum or contact Sharon Anderson, ska2@cornell.edu, (607) 272-2292.

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Upcoming gas lease program in Newfield

Posted on April 17, 2012 by fleasedny

Gas Leases: Legal and Financial Concerns

Friday, April 20, 2012

 7 – 9 p.m.

Newfield Fire Hall

77 Main St.  (just off Rt. 13)

Newfield, NY 14867

 
Free and open to the public!

Presenters:

“Problems with Gas Lease Termination” –  Joseph Heath, Esq. is General Council to the Onondaga Nation and an attorney since 1975.

“Gas Leases and Residential Mortgages” – Greg May is Vice-President of Residential Mortgage Lending at Tompkins Trust Company and has over 40 years experience in the mortgage field.

 ”Impacts of Gas Leases on Home-ownership and Mortgages” – Elisabeth N. Radow, Esq. is an attorney with more than 25 years of experience handling complex real estate development and real estate finance transactions.

After the presentations there will be ample time for questions and conversations with the speakers.

 

Presented by PAUSE–People Advocating the Use of Sustainable Energy

www.newfield-pause.org

newfield.pause@gmail.com

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Video available from Gas Lease Workshop in Sidney, NY

Posted on March 22, 2012 by fleasedny

Fleased was pleased to co-sponsor a gas lease workshop in Sidney, NY on March 18, 2012. You can watch video from the workshop here.

If you are interested in holding an informational workshop for leased landholders in your area, please get in touch with us (fleasedny@gmail.com | 607-539-7133). We’d be delighted to learn about what kinds of resources are needed in your area and how we might be of assistance.

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Gas Lease Public Information Forum to be held March 8th

Posted on February 27, 2012 by fleasedny

Assemblywoman Barbara Lifton will be hosting a public forum to answer landholders’ questions about their gas leases. Speakers will include Attorneys Joseph Heath and Guy Krogh. We hope to see you there!

Thursday, March 8th

7:00 – 9:00 PM

Borg Warner Meeting Room

Tompkins County Public Library

101 East Green Street  Ithaca, NY 14850

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Landowners’ Rights Regarding Oil & Gas Leases To Be Addressed By NYS Assistant Attorney General

Posted on February 8, 2012 by fleasedny

NYS Assistant Attorney General Mike Danaher will speak on Landowners’ Rights Regarding Oil & Gas Leases at Cornell Cooperative Extension of Tompkins County’s monthly Consumer Issues Program this month.  He will help consumers understand what the terms mean, how to evaluate offers and what negotiating rights the consumer has.  The program will be held onThursday, February 9th at 11 AM.

Following the presentation consumers will have the opportunity to consult individually with Attorney Danaher regarding consumer issues they have been unsuccessful resolving locally.  This program, which is free and open to the public, will be held at the Cooperative Extension Office at 615 Willow Avenue, Ithaca, NY.

For more information about the program and what information a consumer needs to bring to a consultation call the Consumer HelpLine at 272-2292 weekdays.  No advance registration is required.

Parking information: The Cooperative Extension Office has a small lot in front of the building. If there are no spaces, street parking on Willow Avenue or West Lincoln Street is available.  Click here for a map: http://g.co/maps/yptvu

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Video available from Nov 14th Compulsory Integration Information Session

Posted on December 19, 2011 by fleasedny

Compulsory Integration Video Now Available Online

         Almost 150 people attended an information session at the Dryden Fire Hall on November 14th to hear a panel of experts discuss Compulsory Integration, a provision of New York State’s mining law that allows energy companies to remove natural gas from properties although the landowner has not signed a drilling lease.  That presentation and the question-and-answer period that followed were videotaped by Cris McConkey and now can be accessed online, along with handouts from the session and additional resources, at http://ccetompkins.org/gaslibrary.

Topics covered at the presentation include an explanation of Compulsory Integration(CI) and its legislative history; an overview of CI hearings and rights; impacts of CI on your land rights and how CI could affect your ability to obtain mortgages and loans.  Speakers included:  Barbara Lifton (NY State Assembly, 125th District); Kenneth Holden of Hancock Estabrook, a Syracuse attorney with natural gas leasing experience who has represented clients at CI hearings; Greg May, vice-president for Residential Mortgage Lending at Tompkins Trust Company; Carol Chock, TC Legislator and member of the TC Council of Governments Gas Drilling Taskforces Committee on Land Values/Assessment; and Nancy Larraine Hoffmann, farmer, spokesperson for Land Stewards of NY, and former NY State Senator.  The public information session was presented by Cornell Cooperative Extension of Tompkins County in cooperation with Fleased.

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Fleased General Meeting

Posted on November 23, 2011 by fleasedny

FLEASED GENERAL MEETING

Click here for meeting flier

PLEASE JOIN US!

December 4th, 2-4 PM
Dryden Fire Hall
26 North St, Dryden
Presenters
Ellen Harrison, Fleased Director
Joe Heath, General Counsel for the Onondaga Nation and environmental attorney
We will also be joined by
Michael Danaher and Dennis McCabe from the Office of the Attorney General

Bring your lease and get your questions answered!

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Gas Drilling and Compulsory Integration: What are your rights?

Posted on November 2, 2011 by fleasedny

November 14, 7:00-9:00
Dryden Fire Hall, 26 North Street, Dryden, NY

Energy companies may be able to remove natural gas from your property even if you haven’t signed a drilling lease due to the Compulsory Integration  provisions of the New York Oil, Gas and Solution Mining Law.

The public is invited to learn more about this topic and to ask questions at a free, educational forum on Monday, November 14 at the Dryden Fire Hall, 26 North Street in Dryden.   Doors will open at 6:30 and presentations begin at 7:00 p.m.  Presentations will be followed by question-and-answer period.

Topics to be covered include: an explanation of Compulsory Integration (CI) and its legislative history; an overview of compulsory integration hearings and your rights; impacts of CI on your land rights and how CI could affect your ability to obtain mortgages and loans.

Presenters include: NY State Assemblywoman Barbara Lifton (125th District); Kenneth Holden, Esquire with Hancock Estabrook in Syracuse, who has extensive experience in natural gas leasing and an attorney and who has represented clients at compulsory integration hearings; and Nancy Larraine Hoffmann, farmer, spokesperson for Land Stewards of NY and former NY State Senator; Carol Chock, Tompkins County legislator and Chair of the Assessment and Land Values Committee of the Tompkins County Council of Government Task Force on Gas Drilling.

This forum is sponsored by the Cornell Cooperative Extension of Tompkins County and Fleased. For more information contact Sharon Anderson, Cooperative Extension of Tompkins County at 607-272-2292 or Ellen Harrison at 607 539-7133 .

 

 

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May 12 Force Majeure and Lease Termination Workshop

Posted on May 4, 2011 by fleasedny

Gas Lease Workshop on Force Majeure and Lease Termination
May 12, 7-9 PM
Dryden Fire Hall
26 North Street

Two attorneys will cover issues of force  majeure and lease termination, for people who have signed gas drilling leases. Presenters will be Chris Denton, an Elmira attorney with extensive  experience in gas leasing issues, who works with clients who have received Force Majeure letters from gas companies. Denton is advising the Joint Landowner Coalition on a draft lease document protective of landowners.  Denton will talk about Force Majeure and what to do if you get such a letter from  the gas company claiming that the lease is extended.  The second presenter is attorney Joe Heathwho  will talk about lease termination, and what to do to clear your title if your lease has terminated but the gas company has not filed papers  with the county clerk clearing your title. They will be joined by landowner Mike Bosettiwho recently went through this process to clear his title.  Joe and Mike are members of GDACC.

Download and post a promotional flier at:http://ccetompkins.org/sites/all/files/63/force-majeure-flier-5-12.pdf

Contact fleasedny@gmail.com with any questions.
Co-sponsored by Fleased (http://fleased.org/)  and Cornell Cooperative Extension of Tompkins County

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Lease Termination

Posted on March 4, 2011 by fleasedny

The information contained herein is provided “as is,” is for educational
and information purposes only, and does not provide legal advice on
any specific legal matter or factual situation. Legal advice is dependent
on the specific circumstances of each situation, so some information
may not be correct for your situation. This information is not intended
to create or provide a lawyer-client relationship. No one should act on
this advice without seeking professional counsel. This information is
not soliciting clients for legal work. This information is provided at
your sole risk. There is no warranty of any kind, express or implied.
Therefore, this information is not a substitute for and cannot replace
the advice of your own legal counsel. If you choose to hire a lawyer, be sure that lawyer has specific and extensive experience in negotiating gas leases.

These materials were developed by GDACC and Fleased gratefully acknowledges their willingness to share them.

Is there a gas lease on your land that is about to expire?  If so, we urge you to stop, consider, and act carefully on your own behalf.

If the expiration date of your lease is near, and you decide that a gas lease does not work for you at this time, do not sign and deposit or cash any check sent by the leasing company, and do not allow anyone to pressure you into leasing again. If you decide to let your lease expire, there are actions you need to take to ensure its expiration.

Although the information was compiled by an experienced environmental attorney, and can legally be used to effectively terminate an expired lease, you may want to consult your own attorney before taking action.

The Lease Termination Packet linked on the “Resources” page contains:

A)  instructions on how to use the information to put a legal end to your expired lease

B) excerpts of the appropriate sections of the New York General Obligations Law 15-404

C) sample Notice Letter,

D) sample Affidavit of Service

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Force Majeure

Posted on March 4, 2011 by fleasedny

The information contained herein is provided “as is,” is for educational
and information purposes only, and does not provide legal advice on
any specific legal matter or factual situation. Legal advice is dependent
on the specific circumstances of each situation, so some information
may not be correct for your situation. This information is not intended
to create or provide a lawyer-client relationship. No one should act on
this advice without seeking professional counsel. This information is
not soliciting clients for legal work. This information is provided at
your sole risk. There is no warranty of any kind, express or implied.

Therefore, this information is not a substitute for and cannot replace
the advice of your own legal counsel.

Many lessors (people who’s land is leased) in New York State have received letters from the gas company leasing their land that claim that the lease will be extended through a clause known as “force majeure.”  The claim is based on the Executive Order issued by the Governor (EO 41) that addresses the issuance of permits for horizontal drilling combined with high-volume hydraulic fracturing.

There are reasons that the assertion of lease extension can be challenged.  The primary reason is that gas companies are not precluded from developing mineral resources using other technologies.  A lengthy letter that explains the arguments against the force majeure claim is available on the “Resources” page of this site.

Lessors wishing to challenge the force majeure claim should notify the gas company (see “Resources” page) by certified mail with a return receipt to prove the company received the letter.  This is important since the legal system will assume that you agree unless you register your objection.  Letting the NYS Attorney General Schneiderman know about what is going on by copying him on such a letter could help raise his awareness and his office might take some action.  His address is shown on the template letter.

Do not cash any checks that the company sends to you. That would indicate your agreement.

 

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Posted on January 6, 2011 by fleasedny

Fleased will be meeting in early February at a location and time to be determined.  Check back here or contact us at fleasedny@gmail.com for more information.

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