The document discusses saving the family farm by leasing the land for gas drilling. It notes that owning the land provides love for the caretaker effect and watching things grow. It then details various current and future potential uses of the property like timber harvesting, mining, a family retreat, and preservation. It outlines considerations for the lease including terms, rights granted to the gas company to access and use the land, safety and environmental protections, and landowner liability. The document is from an attorney providing information to landowners.

1. Save the Family FarmSave the Family Farm
(the Hunting Club…the Family(the Hunting Club…the Family
Retreat…the Woods)Retreat…the Woods)
…then cash the check!…then cash the check!
Gerald A. Lennon, Esq.Gerald A. Lennon, Esq.

2. Why Do You Own theWhy Do You Own the
Land Anyway?Land Anyway?

3. It’s not about the money…It’s not about the money…
 It’s the love ofIt’s the love of
 The land – the caretaker effectThe land – the caretaker effect
 Watching things growWatching things grow
 Rest and recreationRest and recreation
 It’s about friends and familyIt’s about friends and family
 You can’t explain it – You just have to live itYou can’t explain it – You just have to live it

4. Understanding the Current andUnderstanding the Current and
Future Uses of the Property Pt. 1Future Uses of the Property Pt. 1
 Timber – Forest managementTimber – Forest management
 Sand and Gravel miningSand and Gravel mining

5. Understanding the Current andUnderstanding the Current and
Future Uses of the Property Pt. 2Future Uses of the Property Pt. 2
 Family Vacation RetreatFamily Vacation Retreat
 Residential SubdivisionResidential Subdivision

6. Understanding the Current andUnderstanding the Current and
Future Uses of the Property Pt. 3Future Uses of the Property Pt. 3
 PreservationPreservation
 Hunting & FishingHunting & Fishing

7. Mineral Interest – New York LawMineral Interest – New York Law
 Dominant Estate (Minerals)Dominant Estate (Minerals)
 Servient Estate (Surface)Servient Estate (Surface)
Who’s in control?Who’s in control?

8. Term of LeaseTerm of Lease
 Primary TermPrimary Term
 Stated yearsStated years
 Extension for “Delay, postponement or interruption”Extension for “Delay, postponement or interruption”
 Options to RenewOptions to Renew
 Years and CompensationYears and Compensation
 Extended Term - “For as long thereafter as oil or gasExtended Term - “For as long thereafter as oil or gas
are produced in paying quantities…”are produced in paying quantities…”
 Operations conducted in search of oil or gasOperations conducted in search of oil or gas
 A well on lands (or in unit) “Capable of production”A well on lands (or in unit) “Capable of production”
 Oil or gas (or constituents) produced from the unitOil or gas (or constituents) produced from the unit
 Use for underground storage of gasUse for underground storage of gas

9. Leasing ClauseLeasing Clause
““Leasor hereby leases exclusively to Leasee all the oilLeasor hereby leases exclusively to Leasee all the oil
and gas, including but not limited to ...underlying theand gas, including but not limited to ...underlying the
land herein leased, together with such exclusive rightsland herein leased, together with such exclusive rights
as may be necessary or convenient for Leasee, at itsas may be necessary or convenient for Leasee, at its
election, to....”election, to....”
→→ExploreExplore →→DevelopDevelop
→→ProduceProduce →→MeasureMeasure
→→MarketMarket →Store→Store
““...using methods and techniques which are not...using methods and techniques which are not
restricted to current technology....”restricted to current technology....”

10. IncludingIncluding
 Conduct geophysical and other exploratory testsConduct geophysical and other exploratory tests
 Drill, maintain, operate, cease to operate, plug, abandon, andDrill, maintain, operate, cease to operate, plug, abandon, and
remove wellsremove wells
 Use or install roads, electric power and telephone facilitiesUse or install roads, electric power and telephone facilities
 Construct pipelines, with appurtenant facilities, compressionConstruct pipelines, with appurtenant facilities, compression
and collection facilitiesand collection facilities
 Use oil, gas and non-domestic water sources - free of costUse oil, gas and non-domestic water sources - free of cost
 Store gas underground - regardless of the source - injectingStore gas underground - regardless of the source - injecting
and removingand removing

11. The Leasing Clause gives the gasThe Leasing Clause gives the gas
company the right to do:company the right to do:
 Whatever they want…Whatever they want…
 Wherever they want…Wherever they want…
 Whenever they want…Whenever they want…

12. Access RoadsAccess Roads
 Locations – ExistingLocations – Existing
 Serving which lands and facilitiesServing which lands and facilities
 Construction standardsConstruction standards
 Storm drainageStorm drainage
 Access controlAccess control
 Long term maintenanceLong term maintenance
 CompensationCompensation

13. Well Pad Site(s)Well Pad Site(s)
 Prohibited areasProhibited areas
 Set back distancesSet back distances
 Right to inspectRight to inspect
 SizeSize
 Active drillingActive drilling
 Post drillingPost drilling
 FencingFencing
 CompensationCompensation

14. PipelinesPipelines
 LocationsLocations
 Along access roadsAlong access roads
 Fence lines and hedge rowsFence lines and hedge rows
 Size of restricted right of waySize of restricted right of way
 Depth of pipe – crossingsDepth of pipe – crossings
 Whose gas flows through the linesWhose gas flows through the lines
 Compensation – per acreCompensation – per acre
 Long term maintenanceLong term maintenance
 Reconstruction – temporary easementReconstruction – temporary easement

15. 200200 ± Acre Property± Acre Property
Well
A
Well
B
ROAD
3,000’
3,000’
2,100’
1,500’
3,000’
“A” 1,500’ x 50’ wide = ± 1.75 acres
“A” 2,100’ x 50’ wide = ± 2.4 acres
“B” 3,000’ x 50’ wide = ± 3.45 acres

16. Governmental Permits/ApplicationsGovernmental Permits/Applications
 Copies upon submissionCopies upon submission
 Not “discriminatory” as to lands within the unitNot “discriminatory” as to lands within the unit
 No unnecessary interdependence with otherNo unnecessary interdependence with other
units/permitsunits/permits
 Reserve right to commentReserve right to comment

17. Governmental RegulationsGovernmental Regulations
 Affirmative representation to complyAffirmative representation to comply
 Stricter of governmental regulations orStricter of governmental regulations or
lease shall applylease shall apply
 Right to notice of any violationsRight to notice of any violations
 Right to attend any proceedingsRight to attend any proceedings
 If required to attend – Right to bring attorney andIf required to attend – Right to bring attorney and
company payscompany pays
 No right to consent to any resolution of the violationNo right to consent to any resolution of the violation
that would be more detrimental to owner in relation tothat would be more detrimental to owner in relation to
other owners in the unitother owners in the unit

18. OOPS!!!OOPS!!!
 WaterWater
 ProtectProtect
 RestoreRestore
 Continuous SupplyContinuous Supply
 RoadsRoads
 Uninterrupted accessUninterrupted access
 Timely restorationTimely restoration
 Long term maintenance planLong term maintenance plan
 Detention PondsDetention Ponds
 SpillageSpillage
 FailureFailure

19. LiabilityLiability

Insurance -Insurance - $$$$$$ (paid by company)(paid by company)
 IndemnificationIndemnification
 No release upon assignmentNo release upon assignment
 Legal fees, plus out of pocket expenses ofLegal fees, plus out of pocket expenses of
owner plus interestowner plus interest
 Injunctive ReliefInjunctive Relief

20. What does your Mortgage say?What does your Mortgage say?
““That any natural resources, including timber,That any natural resources, including timber,
topsoil, oil, gas or water shall not be sold,topsoil, oil, gas or water shall not be sold,
leased or otherwise exploited without the priorleased or otherwise exploited without the prior
written consent of the lender…”written consent of the lender…”
 Will Lender give consent?Will Lender give consent?
 On what terms?On what terms?
 Will gas company sign lease and pay bonusWill gas company sign lease and pay bonus
without consent?without consent?

21. Other IssuesOther Issues
 Well site compressorsWell site compressors
 Gas StorageGas Storage
 Down stream compressorsDown stream compressors
 Materials StorageMaterials Storage
 Seasonal IssuesSeasonal Issues

22. Questions???Questions???
(Other than when do I get my check?)

23. Gerald A. Lennon, Esq.Gerald A. Lennon, Esq.
Jacobowitz & Gubits, LLPJacobowitz & Gubits, LLP
158 Orange Avenue158 Orange Avenue
Walden, New York 12586Walden, New York 12586
Phone: 845-778-2121Phone: 845-778-2121
Fax: 845-778-5173Fax: 845-778-5173
Email:Email: gal@jacobowitz.com Website:Website: www.jacobowitz.com
This is intended only to provide general information and does not constitute legalThis is intended only to provide general information and does not constitute legal
advice. Legal advice must be tailored to particular circumstances and the needsadvice. Legal advice must be tailored to particular circumstances and the needs
and intent unique to the individuals involved. Nothing in this presentation shouldand intent unique to the individuals involved. Nothing in this presentation should
be used as a substitute for the advice of competent legal counsel.be used as a substitute for the advice of competent legal counsel.
© Copyright 2010 Jacobowitz and Gubits, LLP© Copyright 2010 Jacobowitz and Gubits, LLP