BEWARE, ROYALTY HOLDERS - Gas Producers Are In "Land Grab" Mode

(05/26/2008)

Beware, royalty holders. Natural gas companies and speculators are after drilling rights all over West Virginia. They are trying to lock up rights on many long-ignored proprieties, quickly and cheaply. Royalty owners, in many cases, are getting trampled. The Associated Press reported West Virginia farmer and convenience store owner Brad Castle is still smarting from his experience. Castle thought he was getting a windfall when he signed a $5-an-acre lease and promise of 12.5 percent royalties on gas rights to 800 acres they own near Rowlesburg. His elation disappeared when rival companies started offering $350 an acre and royalties as high as 15 percent, said the AP. Gas companies such as Chesapeake Energy say they are aggressively leasing rights. The Oklahoma City-based natural gas giant calls its aggressive lease acquisition program the "land grab" in its latest annual report to the Securities and Exchange Commission.

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