NY AG Warns Consumers On Entering Natural Gas Exploration Leases

From the New York State Attorney General's Office:

• Attorney General Cuomo today warned landowners of potential perils and strong-arm tactics when dealing with oil and gas exploration companies. [...] The Attorney General’s Office has become aware of potentially misleading or improper tactics used by certain exploration and development companies to obtain leases from landowners. The office is investigating a significant number of complaints from landowners regarding these tactics and urges anyone who believes they have been defrauded by an unscrupulous representative of a gas exploration company to contact his office at 800-771-7755. A new downloadable tip sheet and brochure can be found online at:

www.oag.state.ny.us/bureaus/
environmental/consumer_guides.html.

***

• “If done properly, including implementing the adequate environmental safeguards, increased natural gas production can be mutually beneficial to the landowners, the economy, and all New Yorkers,” said Attorney General Cuomo. “However, in the event New York landowners are approached and asked to sign a lease by a gas exploration company or their agents, they should proceed cautiously, as the process can be rife with potential peril. Consumers must be aware so they do not fall victim to any abusive or misleading tatics. [...]".(1)

For more, see AG Cuomo Cautions Consumers About The Potential Pitfalls Of Oil & Gas Leases (Cuomo urges landowners to know their rights when dealing with gas exploration companies in order to avoid strong-arm tactics and ensure they get the best financial deal).

For anyone interested in the kind of problems homeowners can run into when leasing the mineral rights to their property to an oil & gas exploration company, see:

• Gas deals' fine print can be costly (Fort Worth Star-Telegram; 8-25-07),
• Leases trigger $10 million mortgages (The Intelligencer - phillyBurbs.com; 7-2-07),
• New York Attorney General Looks Into Tactics Used To Obtain Gas Leases (NY AG Press Release - 10-6-04),
• Residual Liabilites at the End of the Oil and Gas Lease: Who's to Pay? (You can run, but you can't hide) (World Services Group - 6-15-07),
• Sample oil & gas Lease documents.

Go here for other posts on dealing with exploration companies over your mineral rights.

(1) According to the NY AG's press release, landowners who enter into an oil and gas lease are typically approached by a “landman” – a person directly or indirectly representing a gas operator. The landman’s primary goal is to secure leases on as large an area as possible. Landmen may approach landowners at their homes or businesses, or may contact landowners preliminarily by telephone before meeting with them in person. [...] The rights and obligations of the landowner and business are detailed in the lease, as in many other types of leases. In most cases, landowners will be bound to the terms and conditions included for the duration of the lease. This means that the rights and obligations set forth in the lease are connected to the landowner’s land. MineralRightsAlpha