Negotiating Extending Undrilled Shale Leases

For more than six years, areas of eastern Ohio have experienced the largest oil and gas boom in Ohio’s history. New technologies in the oil and gas industry have opened up development of the Utica Shale formation, using directional drilling and staged fracking. During this time, thousands of landowners have signed oil and gas leases containing provisions specifically geared for shale development. The majority of these leases contain an initial five-year primary term (which is the time measured from the lease date within which the producer must commence drilling operations). Quite often, landowners received lucrative bonuses upon signing a shale lease. Producers pay out signing bonuses based on the number of leased acres owned by the landowner. Bonus payments have ranged from $500 per acre to more than $6,000 per acre, depending on when the lease was signed and the location and desirability of the leased property...

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