YOUNGSTOWN, Ohio (June 17, 2012) – Alan D. Wenger, an attorney with Harrington, Hoppe & Mitchell Ltd., recently published an article in Ohio Lawyer warning lawyers who represent landowners to avoid lease pitfalls that could bring “disastrous consequences.” Ohio Lawyer is published by the Ohio State Bar Association for its 31,000 members.
In his article “David v. Goliath (read it here),” Wenger warns that Ohio’s shale drilling boom means new challenges to landowners’ lawyers, including “confusing contracts” advanced by energy companies and dramatically slanted in their favor. “We should do better than this for our lessor clients,” Wenger writes.
Wenger, who has led lease negotiations for several large Ohio landowner groups, lists a number of pitfalls in boilerplate leases, including overly broad clauses about royalty determination, eviction and contamination. He offers a number of specific recommendations, such as “leasing only those rights necessary for oil and gas drilling,” limiting leases to “expressly described land” and clarifying all costs to be deducted before royalties are paid to landowners.
On the subject of potential water contamination from drilling activities, including hydraulic fracturing, Wenger warns lawyers to avoid leases that place the burden of proving contamination on the property owner. Wenger says lawyers should “bind the company to furnish baseline water tests” and require it to provide a replacement water supply without having to prove that the company was responsible for contamination.
“Lessors and their counsel must anticipate that problems will occur,” Wenger says.
Wenger chairs the oil and gas law practice group of HHM, the Mahoning Valley’s largest law firm, and also chairs its management committee. Since 2010 he has represented, directly and through landowner groups, more than 4,000 landowners in leases covering more than 250,000 acres of property. He has practiced law for more than 30 years.
Harrington, Hoppe & Mitchell Ltd., with offices in Youngstown, Warren and Salem, provides legal solutions to corporations, other businesses, non-profit organizations, government agencies and individuals. More information is available online at www.hhmlaw.com.
# # #