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Saunders Law Retained by Family to Resolve Mineral Rights Dispute and Obtain Lease

A large parcel of land located in Bradford County was owned by 13 family members who lived throughout the United States. The clients owned the surface of the land and 50% of the oil and gas rights. The owners of the other 50% interest, also a large family, inherited their interests from a prior owner who attempted to reserve half of the oil and gas rights while conveying the land to other members of the clients’ family. The heirs of the former owner signed a lease for their oil and gas interest with the largest leasehold developer in the northern tier of Pennsylvania.

The property was in the heart of the Marcellus Shale “sweet spot” in the most prolific natural gas-producing County in Pennsylvania.  The same lessee had secured leases on nearly all of the surrounding acreage, but the clients’ parcel was essential to the developer’s drilling program. Saunders Law was hired to evaluate the ownership interest of the former owner’s heirs and discovered that the deed reserving a portion of the oil and gas rights did not entitle the heirs to enter into a lease. Saunders Law notified the lessee that its lease with the heirs was therefore void and that the property could not be developed unless its clients leased their rights to the developer.

The developer initially refused to negotiate with our clients, but after nearly 12 months and threats of litigation if drilling commenced under the heirs’ lease, it agreed to a no surface use lease with our clients including monetary terms that we believe were as high as had been signed in Bradford County for any such lease.