Wednesday, November 28, 2012

Gas and Oil and Leases, Oh My!

I don’t spend a lot of time thinking about gas and oil. . .or mineral leases.  A momentary thought flits through my brain when I fill my car, but 512px-Gusher_Okemah_OK_1922no thought at all when I use hot water or turn up the heat or even fire up my gas grill.

It wasn’t until the Title Company found an old (1960’s) oil and gas lease on the property I am purchasing that I became familiar with terms like casinghead gas,  discovered that Ohio has a database of wells and mines, and learned about Ohio’s laws protecting land owners like the Dormant Mineral Act of 1989.

I was further educated when I took time to actually read the oil and gas lease.  The oil company is given the store while the landowner may be doled out a candy bar now and again. 

I can see it now.  Her hands submerged in foamy warm dishwater she observes the unfolding scene through the steamy kitchen window.  Like a ship emerging from fog, a grand sky-blue car turns into the drive kicking dust and gravel into the dry winter air as it advances past the barn and comes to a stop  

Her hair droops from the steam as she wipes her hands on a towel and watches as the oil company rep, in a suit and tie but no coat, emerges from the car and, with a paper in one hand and a wad of cash in the other, strides to the door.  He knocks sharply.  She hurries to let him in from that cold January day and invites him to sit by the stove and warm himself.  He lays the paper and cash on the kitchen table and  asks her about the neat jars of fruit and vegetables along the wall.  That’s her winter ration, she says.  He asks for her husband and she tells him she’s a widow. 

He speaks to her of free heat and hot water and even free gas for her stove.  How much will a gas stove cost? He asks.  When she shakes her head he pulls hundred dollar bills from his pocket and waves them in the air.  You’ll be rich when the first gusher comes in.  You won’t need to worry about anything. 

He lays the contract on the table and pulls from his pocket a silver pen with his name black on it like the oil that will soon follow.  He lease0001carefully prints her name with widow noted below, and tells her to sign at the X.  Her hand shakes as she signs her name.  He pays her $8.75, a five, three ones, and three quarters and winks, then slips her a ten dollar bill.   It’s a signing bonus, he says, because she signed quickly, leaving him time to talk to her neighbors before the day is done. 

She puts the money in an empty canning jar by the stove and thinks of the new stove she was promised.  Soon. 

What happens next?  Nothing.  Nada.  No thing at all.  She’s just sold her mineral rights for $18.75, for a mess of pottage, for nothing.  Now, more than 40 years later, months and thousands of dollars will be needed to remove that useless lease.  I had planned to close on the property before Thanksgiving.  Now it looks like it might be late spring before I can close.

Have you ever done something without fully considering the consequences?  What was the result?  Were you able to fix the problem? 


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