Higher energy prices means energy companies are once again interested in Ohio lands for gas exploration, and the resultant rush to wrap up contracts with landowners risks leaving some landowners holding an empty bag.

Higher energy prices means energy companies are once again interested in Ohio lands for gas exploration, and the resultant rush to wrap up contracts with landowners risks leaving some landowners holding an empty bag.

About 100 people attended a presentation Feb. 24 at the Ohio State University Newark campus regarding traditional oil and gas contracts and how current contracts have changed, potentially shortchanging landowners.

Howard J. Siegrist, Licking County agricultural extension coordinator, said the state of Pennsylvania has seen a boom during the past three years in oil companies developing Marcellus shale and Utica shale in the Allegheny-range area, extending all the way into central Ohio.

Siegrist said it is unfortunate that most landowners simply don't have the expertise to negotiate complicated leases and tax implications.

"This whole process some of you are going through right now is not in the next six weeks or two months," Siegrist said. "You might be fact-finding for several months."

Dick Emens, an energy attorney, said more than 1000 wells have been drilled in Pennsylvania during the current boom and another 500 in West Virginia. Ohio has fewer than 50 wells, but the number is growing.

New York state, in contrast, has a much larger amount of Marcellus shale but has no wells because the state's EPA is not allowing wells until it completes an environmental study.

Emens cited many examples of energy companies taking advantage of landowner inexperience by including contract clauses that are difficult for most people to understand.

"Please don't sign an oil and gas lease without understanding every word in it," Emens said. "So many call up and say, 'I signed this lease; what can I do to get out of it?' It's really sad."

Prices range a great deal, Emens said, adding that he has seen one landowner be paid $100 an acre while one neighbor receives $300 and another receives $1,500 for comparable land.

Some leases insert complicated clauses in them about gas storage and about deep waste-injection wells, which are entirely different from gas-production wells, Emens said, and should have entirely separate contracts.

"Those are very valuable wells," Emens said. "People pay to get rid of wastewater. Some of these leases just have a little clause that says lessee has the right to drill injection or disposal wells. They might pay you a dollar an acre or $1,000 a year, but you should get a lot more than that for an injection well on your property."

Another clause Emens has seen states that no "implied covenants" are in the contract. The problem with this, he said, is that landowners do not know what implied covenants are, and the covenants have been developed by courts exactly because oil companies take advantage of landowner ignorance. Examples are a duty to develop and produce, which is the only way landowners get paid a fair return for the lease, Emens said.

Other provisions would allow energy companies to use the water resources on the land, but this could be dangerous because many drilling technologies use large amounts of water that could affect the landowners' use of the land, too, he said.

Landowners also are at risk of being misled into believing they are signing a lease for only five years, but that various clauses having to do with mineral rights, easements, gas storage and discretion of the oil company to extend the lease if its own opinion is that the land could someday produce gas could all result in the landowner being tied up for years, perhaps forever, with no revenue coming in, he said.

Emens said the main thing was to be informed and to keep a copy of the lease.

"I can't tell you how many landowners don't have a copy of their lease," Emens said. "The first thing we tell them is, they have to go to the courthouse and get a copy of the lease."