Letter to the Editor: July 6, 2013
Why the change?
EDITOR: This is a copy of a letter written to Pa. Energy Executive Patrick Henderson:
Dear Mr. Henderson,
Please ask the governor if he also resents the notion that gas companies should be able to "reopen" existing leases to renegotiate anything and if he views that as unfair to landowners, because that is being done everyday. I can't tell him how many times a day that happens up here. "If you don't change/modify your lease, we will just cut you out of the unit and you'll get nothing," is the standard gas company refrain when they seek to reopen existing leases that they wrote in the first place. If he wants examples, I can supply an endless number.
Just yesterday I met with a member of the Wyoming County Landowners (Mr C.) who was told by a major company's senior landman that if he did not modify lease language to allow for a larger pool unit than his lease allowed, that he would be cut out of the unit altogether and the senior landman brought and left with (Mr.C.), calculations showing (Mr. C.) would loose $3 million dollars in royalty over the life of the lease unless he modified.
When (Mr C.) declined because of a lack drilling guarantees, the major company's employee slammed his notebook shut and left. I offered an alternative method that may satisfy both but, there has been no resolution as of this time.
Landowners signed contracts under a set of circumstances for known resources, in many cases with locally known companies. New technology caused contracts to become outdated and in need of modification. With the advent of horizontal drilling, corporate gas companies, knowing beforehand, that the terms and conditions did not provide needed pooling or unitization language, came along and bought out those leases. In other cases, gas companies wrote the very contracts that they now say are inadequate. Circumstances changed, both parties negotiated based on what they knew at the time. Now one party says, "Things changed, we didn't know, our experts failed us, the government needs to bail us out.
I personally resent government intrusion into every aspect of my business and personal life, and when I voted for the governor, he campaigned on that same principal. I'm not sure why he changed.
Coordinator - Wyoming County Landowners LLC
Board Member - Pennsylvania Chapter, National Association of Royalty Owners