The industry is apparently taking the same tack with NYS “marks” as they did here [in Texas].

The need for pipelines and the total inability of municipalities to use police powers to control ROW selection for these ticking time bombs is an omission of material fact in mineral leases (producers 88) that makes this contract fraudulent in the inducement.

Drillers know that if they described their complete plans for production to potential lessors and municipal governments there would be nobody who would sign a lease.  Their con game involves appealing to greed to get the wells in the ground while saying as little as possible about any facts that would raise concerns. Then once they have spent millions of dollars on the well drilling (with the cooperation of the marks and the government) they will be in a position to threaten a lawsuit if there are any objections later to the infrastructure needs they unveil as it becomes necessary to do so. At that point they play blame-the-victim and ridicule any naysayers as being stupid for not realizing that pipelines, gas processing plants, and compression stations were going to be required. They will say “Buyer beware!”, and “You failed in your obligation to do due diligence before signing.”

But the fact is that the contracts are fraudulent by omission of material fact. I know of no case law where this issue has been tried, but I’m not a lawyer, either.

Jerry Lobdill
Fort Worth, TX