Thursday, March 29, 2012
Dear Friends, Coalition Leaders and Landowners, It is very satisfying to see and hear so many positive signs that we are getting closer to leasing our land and developing our natural gas in New York . While I can’t predict exactly when it will happen, the road blocks we have faced in NY should soon be removed allowing us to exercise the rights and realize the opportunities we have waited nearly 4 years to enjoy. Please keep in mind that after NY opens up it may take a little while longer for serious, legitimate leasing companies to work with coalitions to come to terms on mutually rewarding and protective lease offers. Beware though that as this comes to be there will also be opportunists in your area looking to take advantage of those that feel they just simply can’t wait any longer. Their plan is to prey on that impatience to talk people (and even coalitions) into signing low ball risky leases just before NY opens up and negotiations with coalitions start. They think that time is now! Their first goal is to collect as many cheaply leased acres as they can, as fast as they are able to, possibly with no intention of actually producing gas or royalties. While they will deny their intentions, they know that once NY opens up leases will become more rewarding and protective than what they can offer. They wouldn’t make their early low quality offers if they didn’t believe that! Their second goal is to flip the cheap leases they acquire for more lucrative deals with serious companies. These early speculators will make a fast buck at the expense of the people who sign with them. These early offers may even come from a neighbor that a company enlists to peddle their offer in an attempt to disguise it as a landowner friendly rewarding coalition lease coming from a trusted source. Fortunately there are some simple steps you can take to protect yourself. First and foremost, consult an attorney of your own who is experienced in gas leasing issues if you are approached with an offer. Second, have a clause in your lease that provides you with a share of the profits if the lease is flipped. If a company will not agree, it should be a warning that they may be looking to flip for a profit at your expense. There are many ways to draft such a clause, and many other important protective clauses (Pugh, Indemnification, Incurred Fees, and many more) to have, so again consult an attorney who is experienced in gas leasing issues. Third, do not rely on the company’s representative or attorney to advise you. Even if his fee comes out of your money, he does not represent you or your interests. Consult an attorney of your own who is experienced in gas leasing issues. Fourth, join a coalition and encourage all of your neighbors to do the same. Alert your coalition leaders to any gas leasing/development activity or offers you learn of. Keep informed of what your coalition and others are doing. Do not try to go solo. There is strength in numbers. But even when in a coalition, consult an attorney of your own who is experienced in gas leasing issues. Fifth, beware that anyone who has not been involved in leading a coalition previously but suddenly starts promoting a lease may be acting on behalf of a single company rather than seeking competitive offers from multiple companies as most coalitions seek to do. While such an offer may be good, rewarding, protective, and legitimate, consult an attorney of your own who is experienced in gas leasing issues before signing the offer. I hope this helps to put matters in a positive yet sensible perspective. Now more than ever patience and caution is required to realize what we have been working for. The JLCNY and local coalitions have been fighting very hard for each and every landowner’s benefit. But when it comes time to sign an offer only you and your attorney can assure you’re doing what is right for you. I urge you not to throw away your years of waiting in a moment of careless impatience. Prepare yourself now to proceed cautiously but confidently towards realizing what you’ve been waiting for. You’re almost there! Warm Regards, Dan Fitzsimmons, President Joint Landowners Coalition of New York, Inc.