Pennsylvania Gas Lease Review Checklist

Two parts:
– Part 1: the printable checklist (designed to fit one letter-size page, two columns, 9–10 pt body text)
– Part 2: landing page copy for /gas-lease-checklist/ and the thank-you page

Part 1 — Printable checklist (PDF copy)

File name: kostrub-law-pa-gas-lease-review-checklist.pdf
PDF title (metadata): Pennsylvania Gas Lease Review Checklist — Kostrub Law Firm

For landowners in Washington and Allegheny counties. Use this list to read a gas lease offer before you sign. A “lessee” is the gas company. A “lessor” is you, the mineral owner.

Money

• [ ] Royalty rate. Your share of production, as a fraction or percent. Pennsylvania’s minimum is one-eighth (12.5%) under 58 P.S. § 33. Is the offer higher?
• [ ] Post-production deductions. Does the lease let the company subtract gathering, processing, or transport costs from your royalty? Look for “at the wellhead,” “net,” or “market enhancement” wording.
• [ ] Bonus payment. How much per acre, and when is it paid? A bank draft or “order of payment” may not be paid until after title review.
• [ ] Shut-in royalty. If a well is drilled but not producing, what is paid, and for how long?
• [ ] Royalty statements. Does the lease require statements that meet Pennsylvania’s reporting rules (58 P.S. § 35.1–35.2)?
• [ ] Late payments. Is interest owed if royalties are paid late?

Term

• [ ] Primary term. How many years before the company must drill or produce?
• [ ] Extension or renewal option. Can the company extend the lease for another bonus? At what rate?
• [ ] “Paying quantities.” What keeps the lease alive after the primary term?
• [ ] Pugh clause. Does acreage or depth outside a producing unit get released at the end of the term?
• [ ] Force majeure. Which delays can extend the lease, and is there a time cap?

Land & Surface

• [ ] Surface use. Can you limit or approve the location of well pads, roads, pipelines, and equipment?
• [ ] Water. Is pre-drill testing of your wells and springs required? Is replacement water promised if supply is harmed?
• [ ] Damages and restoration. Who pays for crop, timber, and fence damage? Must the land be restored?
• [ ] Gas storage. Does the lease allow the company to store gas under your land? You can ask to remove it.
• [ ] Indemnity and insurance. Does the company protect you from claims and carry insurance?

Pooling & Units

• [ ] Pooling rights. Can your land be combined with neighbors’ land into a unit? Is there a size limit or a requirement to include all your acreage?
• [ ] Cross-unit wells. Does the lease address horizontal wells that cross unit lines (58 P.S. § 34.1)?
• [ ] Depth. Does the lease cover all depths or only certain formations?

Title & Ownership

• [ ] Do you own the minerals? Check your deed and earlier deeds for “excepting and reserving” language at the Washington County Recorder of Deeds.
• [ ] Warranty of title. Does the lease make you promise you own the minerals? Ask for a limited or no-warranty clause.
• [ ] Proportionate reduction. If you own less than 100%, is your payment reduced fairly?
• [ ] Mortgage. Does your lender need to approve the lease?

Before You Sign

• [ ] Assignment. Can the company sell the lease to another company without notice to you?
• [ ] Disputes. Does the lease require arbitration or a court outside your county?
• [ ] Everything in writing. Any promise a landman made out loud should be in the lease or an addendum.
• [ ] Deadline pressure. Do not let a short deadline stop you from getting the lease reviewed.
• [ ] Keep copies. Keep a signed copy and the recorded memorandum of lease.

Questions about your lease? Call (304) 982-1586 or visit kostrublaw.com/oil-gas-lease-review/ to request a lease review with attorney Dan Kostrub.
Kostrub Law Firm, PLLC · Cecil Township, Washington County, PA

This checklist is general information, not legal advice. Reading it does not create an attorney-client relationship. Every lease is different. Have an attorney review your lease before you sign. Attorney Advertising.

Want help applying this checklist? Call (304) 982-1586 or request a consultation.