Usually these existing leases are 2006 or later vintage, and still within the primary term. Sometimes the leases are older, with the leased property actually being in production with a “shallow” vertical well.

In all cases, the lessor under these leases probably had no idea of the concept of deeper-level shale oil and gas exploration at the time the existing lease was signed.  Probably the lessee did not anticipate this either.

Now, the lessee sees big dollar signs through assigning the “deep rights” for the shale layers on the leased property to a shale leasing sub-lessee. Your lessee would reap new benefits (per acreage payments, lease overrides, and others) from the deal. You would be stuck with whatever rights you have under your existing lease.

The documents your lessee asks you to sign are often drafted to look harmless. Perhaps your lessee has even told you that it is “routine” and you are required to sign it under your existing lease. Do not listen, and do not sign without prior careful review by an experienced attorney.

Some of the “hooks” in some of these documents:

• An expansion of an allowed unit size (such as from 160 acres or 240 acres to 1200 acres).
• An extension of the primary term.
• Amendment as to surface and subsurface lessee rights.
• Alteration of indemnities, and addition of waivers as to damages caused by the lessee.

You do not have to sign, regardless of what the lessee tells you.

Perhaps your lease has a clause requiring your consent to an assignment by the lessee, and provides that consent is not to be “unreasonably withheld.”

It is not unreasonable to withhold consent in return for more information, and payment to you of additional consideration.

You should not give up your valuable shale oil and gas rights that you and your original lessee were not even aware of at the time you signed your lease, unless you are fairly paid for those rights.

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Alan D. Wenger is an attorney in Youngstown, Ohio. His practice areas include oil and gas law, public utilities law, labor and employment law, land use law, environmental law, construction law and school law.