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Joining Forces For Favorable Mineral Leases

by Kenneth E. DuBose on October 17, 2011

Joining together with other landowners can increase your bargaining power as well as make paying an attorney an economically feasible option. Farmers in Ohio are joining forces to help negotiate leases that do more than simply lease their minerals. Lease bonuses have soared in recent weeks to as much as $5,000 per acre is hot areas of Ohio.

Years ago, Bob Rea of Leetonia in Columbiana County was approached about leasing the mineral rights to the 40-acre farm, passed down from his great-grandfather.

He studied the contract the leasing agent gave him and said he realized it was written to benefit of the oil companies. So, Rea along a group of landowners started the Associated Landowners of the Ohio Valley, or ALOV, a non-profit organization. They have represented landowners from 11 counties around Columbiana County and completed leases on 100,000 acres with 100,000 acres still pending.

“Too many farmers were signing for the bonus money, giving the drillers all the rights and little oversight by the owner,” said Rea. “Twenty-five years ago, signing bonuses for a lease were $2 to $5 per acre, now it’s nearing $5,000 an acre.”

Working with a legal firm drafting lease language, Rea said the ALOV is “farmers helping farmers.”

“We want to be very specific, we think that’s the first step in understanding mineral ownership,” he said.

“This natural gas boom has the opportunity to bring jobs back to this area like we have not seen the steel industry,” said Jill Mcnicol.

Read the entire news article at nbc4.com

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