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freshoilandstone t1_iyods1s wrote

Good for both of us I suppose.

Blind loyalty to the gas companies is fine from the perspective that the drilling/extraction results in job creation but those jobs come from the exploitation of the farmers around here who don't have two nickels to rub together.

Gas companies have been offering leases since the 60's even though no work started until about 10 years ago. So some of these folks with 500 acres or so leased for 50 cents per acre. The leases are self-renewing every five years; all the company has to do is pay the landowner a nominal fee, usually $50. The leases are short but complicated and pretty much every bastard attorney around here was "urged" to get as many signatures as possible as quickly as possible. As a result negotiating for a better deal for the landowner wasn't really a high priority.

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There's three big parts of the lease, although it all runs together as one document:

How much per acre up front to sign

Royalty percentage

How will the royalties be paid

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A lot of people realized they could negotiate the first part but didn't pay enough attention to the other two. So if you got $1000/acre at 12% paid before company expenses you may have thought the deal was pretty good but you would have been taking a royal screwing. "Before expenses" means the gas workers get paid and the equipment bought, etc., out of your royalty cut. It makes a huge difference. As an example, we make our $5000/month off ten acres (we don't make that every month - sometimes it's more sometimes less, but that's an estimated average over the past 7 or 8 years). The lady across the way has 54 acres - she never has gotten more than $500 in a month. I'm not lamenting for myself obviously. What they've paid us paid for our land and our house and they'll be financing our daughter's education and ultimately supplementing our retirement and providing our daughter with a nice monthly income for likely her lifetime. But not everyone got the same deal. Those people who didn't went in all wide-eyed thinking this was the break that would pull them out of the rural poverty cycle and instead turned out to be the break that bought them a new dirt bike every couple years.

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