Monday, May 9, 2011

If you don't lease we will cut you out of production.... forever

letter from Landman representing Chesapeake
Over the last two years NY landowners, tired of fraudulent pressure tactics used by landmen to get people to sign leases, appealed to the Attorney General. One company, Fortuna (Talisman) agreed to halt those practices.

But Chesapeake refused, and this week a Towanda, PA landowner shared a letter received from a landman representing the energy company. The landowner has, over the past three years, refused to lease his mineral rights to any gas company.

But on May 5, landman Craig LaPointe from Redsky Land LLC, “agent for Chesapeake Appalachia” sent yet another letter, one using language clearly meant to intimidate the landowner into signing a lease.

“Due to an undisputed fact ... your parcel can/will be cut out of production forever,” LaPointe wrote. He explains that he wants to make sure he is giving them “…as many opportunities as possible to make your final decision.” Of course, he mentions that the money would impact the landowner and many generations to come.

The landowner, just as concerned over those many generations to come, does not want to leave a legacy of health problems, air pollution, water contamination and soil erosion. According to an email from the landowner, “Chesapeake has just completed construction of a well pad on a farmer's property approximately 4,000 ft. to the east of our home.” After describing the land, he adds, “Chesapeake plans to drill horizontally in a northwesterly direction towards the river.  The northernmost 11.6 acres of our 20 acre property is within their planned drilling grid.”

Thus the letter and landman LaPointe’s observation that “… current laws cannot keep the drilling from extracting the gas from under your property…”

preparing well site in Towanda, PA
Remember, this letter is addressed to a PA landowner. They don’t have compulsory integration or “forced pooling” in that state, so the drillers can’t go under their property. Though they can drill right on the border and fractures “could” extend hundreds of feet under unleased land because – hey – they can’t control exactly where those fractures go, right?

After listing two parcels that, he says, have been cut out of units forever, LaPointe ends his letter by reminding the landowners that “There are many types of riders you can add to your lease that are already available if you are concerned with protecting your land.” While he signs off with a helpful offer to answer any questions and concerns, the tone of the letter is … bullying.


  1. It's a dilemma we have in this "free-market" world. As long as a salesperson doesn't blatantly misrepresent, he/she is allowed to try pretty much anything to "close a sale." Often the tactics are questionably ethical. But even if they aren't, there's no legal recognition of the right of potential customers to say "no" and have that response be respected. Many salespeople view it as a sign of their prowess if they can get people to agree to something they really don't want to.

    A polluted well, a hellish environment, a worthless property and serious health problems are probably the most extreme outcomes of unethical sales practices, but the ill effects of this scuzzy technique screw up a lot of lives across the board.

    Jim H.

  2. Sad, but not shocking. Aside from the bully tactic displayed here, the landman clearly misses the landowner's point, and obviously has no respect for his position, so he goes with the tired old tactic of Hurry Up And Get Your Money! This deal won't last long, and ALL of your neighbors have signed, so don't YOU miss out on this once in a lifetime opportunity to get rich! Your condo on the beach in the islands awaits! All you need to do is sign on the dotted line, but again, time is of the essence. p.s., We're going to drill no matter what you do and what the laws say, because for every law, there's an exemption. Where that fails, we;'' just drill where we want, because no one can see that far underground, anyway.

    If they lie to you on the surface, isn't reasonable to assume they will lie to you underneath?

  3. sad and horrible-- the gas companies and landmen want every drop , ounce of gas and land in their control-- the greed is limitless--

  4. Thank you for posting this important information. My family has property in French Azilum, Bradford County, within a few miles of Towanda. So far our family of 200 or so members, who have loved the valley since 1930, have managed to barely avoid signing a lease. All the property in French Azilum is leased to Chesapeake and Chief, except for our 11+ acres. Some of our family wanted to sign immediately in 2008, but due to some loud protest from a couple of people (me included), we didn't sign. However, I am still worried that we will eventually cave and sign, especially because it is increasingly obvious that we will not be able to safely visit there in the summers before too long. So why not take the money and leave? My answer: I will never sign a gas lease for any reason, not even for money. But I only have one vote in our family corporation. Our family president is retiring soon and selling his home located in Wysox right on the Susquehanna River. I am told that there is a gas guy interested in buying his property. Maybe we will end up selling our once-beautiful sacred spot where our ancestors are buried in the church cemetery (which is also leased property!). The buyer could well be a roughneck or other gas guy. This would be a most ironic and tragic end to our family homestead.

    Many thanks for your journalistic excellence in reporting the real news!


  5. There is one problem with the logic of this landman, PA has a tresspass law. If the hydrolic fracturing damages the adjacent unleased land then there is a tresspass. In normal gas drilling you are collecting from a pool, but with hydrolic fracturing you have to damage the land to produce the gas. So at this point Chesapeake will be in volation of the tresspass law by having the created fractures allow the fracking fluids too enter upon the other property for the stimulation of gas and damage the unleased property.

  6. Red Sky is the worst of the land companies, in my opinion. I urge you to post this letter and/or a report of it on the Landman Report Card website. The more we can warn others in advance of these tactics, the better prepared they will be to deal with these guys.
    I too have been told verbally that they will "leave me out forever" and also that they will just take the gas out from under our property by drilling up to the boundary. Still not signing...

  7. I don't detect any bullying in that letter. LaPointe is implying strongly that the landowner is foolish to pass up leasing, which is rude, to say the least, but hardly bullying.

    If that landowner does not lease, then the horizontal drilling and fracturing should not be permitted under his property. Laws should be on the books requiring drillers to prove that they respected unleased land. Seems like a job for some crusading attorneys.

    Ending compulsory integration is another job for crusading attorneys in New York. It was intended to insure fairness in conventional drilling where pools of gas are simply emptied and extraction from unleased properties would be impossible to stop. The state felt it was unfair for landowners to be deprived of royalties. In unconventional drilling landowners may keep their gas if they wish.