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HomeMy WebLinkAboutThe Exeter Times-Advocate, 1977-02-10, Page 5I) o • gas. While a landowner cannot be forced into signing a storage agreement. Ontario law provides for expropriation of storage rights, should a voluntary set- tlement not be possible. Compensation in the cases of expropriation is set by the Ontario Energy Board, after all evidence is heard from both the landowner and the Company developing the storage. A lease or storage agreement is generally for a set term of years, normally less than 20, or if a discovery is made or if the lands are used for storage then the lease runs for as long as production is taken or storage is being carried on. The lease signed by landowners is generally registered against the lands in the registry or land titles office, Should the lessee (person or company taking the lease) wish to surrender the lease at any time, he will usually grant a release of his right back to the lessor (landowner), Registration of this surrender automatically clears the title of the original lease. Should the lessee fail to issue such a surrender, the landowner can get the defunct lease off his title by representations to judge and or the Master of Titles. One .good way to help ensure a surrendered lease is cleared of title is to make sure the lease contains a. clause such as: "Lessee upon surrendering all of its interest in the land, shall at its own expense register such surrender in a Registry or Land Titles Office for the Registry or Land Titles Division in which the lands are situate." However, this clause is no guarantee if the lessee is not reliable or cannot be found. If a landowner leases his oil and gas rights and later sells his farm then he must understand that the lease goes as an en- cumbrance with the title and must be assumed by the new owner who in turn is entitled to receive the further rentals and royalties that the lease earns, unless the mineral rights are reserved to the former owner. A question that is often asked is what payment should a lan- downer expect for signing a lease. This varies from time to time and from area to area. In the area of Huron-Middlesex the standard annual payment of $1.00 per acre is paid as an annual holding fee. In addition most companies pay a minimum of $100 per acre per year for all of the surface area used in con- nection with drilling or con- struction projects. Damage to land is a matter of great concern to farmers. Nearly all leases provide for payment of damage. The damage clauses in all leases should be closely read, as these clauses often cover the most important part of the lease income. The ideal clause states that the lessee shall compensate the Lessor or other person en- titled for any and all damages sustained or expenses incurred by the Lessor at any and all times by reason of the exercise by the Lessee of any rights herein granted and including damages caused by acts or omissions of the employees, agents and con- tractors of the lessee and such liability shall continue for the full term of the lease, An acceptable clause states that the Lessee agrees to com- pensate the Lessor for actual damage done by the Lessee to existing crops, timber and im- provements on the land so taken. The Clause that should be avoided is the one which states that the Lessee agrees to pay the Lessor for all damages to growing crops and to leave gates and fences as found. A lease should be signed only with a reputable company and never with an individual whose credentials you do not recognize. A fairly good rule is to say "any dealings with a reputable firm cannot harm me unduly regar- dless of what the written contract says but any dealings with a swindler will injure me regar- dless of how good the contract terms are on paper. Better to deal with the devil you do know than the devil you don't know." The landowner should never sign a lease with anyone he does not recognize unless he has first checked with his banker or checked with his lawyer or checked with one of the farm organizations. It must be borne in mind that it can cost the landowner money if he signs the lease with a disreputable party which does not pay the promised rents or royalties and does not clear the lease of title. In this event, it can, cost the landowner at least $50.00 to get the invalid lease struck off the Registry books. Naturally, the landowner is interested in the royalty that he can expect to receive. The ac- cepted percentage for oil is 121/2 per cent or 1 barrel in 8 of all crude oil produced. With gas wells there are two methods of determining royalty. The preferred method is the same as that used for oil, a straight 121/2 per cent for all gas produced. The second is to pay the landowners so much rent per well, related to the production capacity of each gaswell. The latter method is not recommended. Another concern to farmers or landowners is whether geological well location or ottar *fftveys conducted aprons companies or individuals across land in the search for oil and gas or storage is not harmful to a landowner providing that compensation is paid. The conduct of suet surveys in no way obligates the lan- downer and indeed could be beneficial to him in as Mob as oil, gas or storage May be discovered under the land and the income from the stetting/era lease is new earning power for the landowner. Only by con- ducting surveys are new fields found and new income created. Therefore, surveying is to be encouraged not discouraged. Landowners would be wise to insist that an indemnity clause be included in the lease. Such a clause would put the onus on the oil company to pay damages to neighbouring property, otherwise the landowner could be held responsible for any damages done to his neighbours land resulting from exploration, drilling and extraction operations. Having made the foregoing comments I will endeavour to answer the question whether it is desirable for a landowner to sign a lease. The answer to this question is "No", if the person tendering the lease does not NOW WHERE WAS THAT ROAD AGAIN? —Hay township had to hire bulldozers to find some of their roads following the recent stormy weather. The heavy drifting snow had buried some township roads under up, to ten feet of drifts and the plow was unable to budge the hard packed snow. Finding the roods again was not always an easy task and in some cases it took the bulldozers up to three hours to- open one mile of road. Photo by McKinney stieellealleor" CALLING ALL EN How would you like to have a scene like this at your place on Valentine's Day ? You Can If You Let Earl Campbell Help You Select A Beautiful Gift • Charms • B racele ts • Rings • Neck/aces • Watches • China • Silver • Cameos • B rooches • Ornaments all this plus You know you can count'on our helpful friendly staff to assist you with your selection. Free gift wrapping included. JEWELLER MAIN ST. EXETER Love at First Sight . Fully Processed, LB. $1 .05 Fully Processed, LB. 85 4 Fully Processed, LB. 65 t Sides Fully Processed, LB. 75' MASTER LEVY '2's 13 oz. 4's ' 72 bags $ 1 •19 49' 75' 24 oz. 45' Noodle 4/$1 4 Rolls 99' 24 oz. 63t EXE FA Main St., Exeter PhOne 235-01100 xt „., r.R, It's Okay As Long As You've Had A Recent Eye Examination LET US ARRANGE ONE FOR YOU TODAY SO YOU KNOW YOU'RE PROTECTING YOUR MOST VALUED POSSESSION - YOUR EYES Carpenter Optical Shoppe 405 Main St. 235-051 1 Exeter HURON COUNTY BEEF --warvrwrger1OP'14 February Special No charge for slaughtering. We keep the hide. We Specialize in Custom Processing, Curing and Smoking HINDS SIDES FRONTS PORK ALL VARIETIES PACKAGED SCHNEIDERS LUNCHEON MEATS 1 0% Off Reg. Price Schneiders Cheese Slices 8 oz. pkgs. 2P1.49 FROZEN FOOD PRODUCE Pink or White ... Grapefruit 3/59( Spanish Ice Cream Onions ea. 254 Macintosh Apples 3 lb . 654 Allen's Orange Crystals Flowerdale tea White Swan Toilet Tissue Monarch (Three Kinds) Snacking Cake Palanda Crushed, Tidbits or Sliced Pineapple Aylmer Vegetable, Tomato & Chicken Sows Cottonelle Toilet Tissue Sunlight Liquid Silverwoods Deluxe All Flavours 2 litres 1 .19 Oil companies look at district oil rights rights of the owner in his title to land. In Southern Ontario, except in extremely special cases, the mineral rights are owned by the surface rights owner,The same is not true, however, across Canada, In Northern Ontario and in the Western Provinces, most of the mineral rights are still owned by the government, Generally speaking all land obtained from the Crown prior to 1895, had the mineral rights to go with the surface rights, but since 1895 all land has had the mineral rights withdrawn and only the surface rights were given to the in- dividual owners. An oil, gas or storage agreement or lease is an agreement whereby the lan- downer leases to another in- dividual or a Company, his ownership to the oil, gas or storage reservoir which may be under his land. The purpose of a storage agreement is to grant rights to a company to utilize underground reservoirs for the injection of gas during periods of low demand and withdrawal during periods of high demand. No land owner can be forced to sign an oil or gas lease but in the event of a discovery of oil or gas, near his property, a landowner's oil and gas rights may be pooled with another so as to provide efficient production of the oil or The column that's read for a purpose . . . gm IN „, ihiffill) k , r4:'.7.7".,,_ 11, * ‘,, by Scotty Hamilton II . Mail your problems to "Impact" c/o this paper. All letters will be answered provided a stamped addressed envelope , n is enclosed. Some of general interest will be published. 1 ,-, 1 Letters must be signed but we will NOT reveal your identity. "These Questions and Answers based on Ontario Law, %. '', . are published to inform and not to advise, No one •, .should try to apply or interpret the law without, the 'aid and advice of a trained expert who knows the ' facts, since the facts of eactl case may change the .t ." ,j application of the law." NO PHONE CALLS PLEASE EXETER 7LailY MONUMENTS LETTERING T. Pryde 293 EXETER EST.1919 MAIN & T. S. - MARKERS are ,,,‘ 0620lik Ltd. So n PHARMACY LTD. 235-1570 235--4.0; ANYTIME or 235-1070 373 MAIN ST. . , FUNERAL HOME 370 WILLIAM ST. EXETER 235-1220 . A MEMBER OF THE ONTARIO ASSOCIATION A NE a SE FU RVICE RAL it the car. pay but car" old you is. • it . 1 I I 7. Because cing until $698 away. dealer I purchased a used car of previous financial through G.M.A.C. so by my paying it directly it was paid in full. after getting certification. In mid-November '76 dealer to see if there I still owe him $30.98 the balance. The dealer told me I didn't think so as Unfortunately there is regardless of whether one, and this applies or privately. There's buy a used car you're This of course is not always Sorry but we don't see Gordislroplues riiiki orr 3W/0 ilioPHIES Engraving Done On Premises 382 MAIN from a local dealer in June 1976. problems I could not finance the dealer took charge of the finan- to him. He kept the ownership The price of the car was about . the motor stopped! I went to was any way I could get another and he has my ownership until it lasted pretty good for the money I don't have any money to throw no such thing as a "guaranteed it is a late model automobile whether the car was purchased from a well worn phrase, saying, "When buying someone else's trouble." the case, but unfortunately that you have any recourse. • ngraving Radio Ihaek Authorized dealer For all your RADIO STEREO and C.B. needs see ST. ;FORMERLY EATONSI 235-2261 see I USED or an a often us! *o.GCT Ecideptead iSc Get 641 Peecaute aim s. REAL ESTATE LTD. 235-2533 489 Main St., Exeter Bob Shirrs Hwy. 4 & Huron Pk. Rd. RESTAURANT it* COFFEE BAR Final; Fast Take Out StliVi *1 * tab! Groceries Variety 228- GAS for LESS! 6751 Almost two months ago I sold duly transferred it, notified my assumed that was the end of it. Not so! I received a summons weeks after the date of sale, and explained what had happened, have to come down with evidence made on the day I said and registerd. So I wrote the Motor Vehicles and asked them to forward me deed in the new owner's name violation. After this was done, I was finally can't help wondering why all this place, and how many other summonses. We're fold that the main motor to, (Queens Park) handles in excess transfers a year, so not surprisingly, puter goofs. The reason that there are few most loco/ police departments now tral data computer through the C.P.I.C. mation Centre), my car privately for cash. I insurance company and for illegal parking three I phoned the police station but was told that I'd that the sale had been the ownership change Records Branch in Toronto proof that the car was in- at the time of the alleged "off the hook", but I performance in the first drivers get issued incorrect vehicle registry office in Toron- of one million ownership "once in a while", the com- slip,ups nowadays is because have direct access to the cen- (Canadian Police Infor- Times-Advocate, February 10, 19.77 Page 5 renresent a good lessee. and if new production should be Under no circumstances should found and developed he will have a landowner sign a lease with an a substantial new income from unknown firm or individual ,nor royalties, By leasing his land, the sign with a company or in- landowner will share in any new dividual which has a reputation production found without having for unfair dealings. The answer is any of the attended risk and "Yes", if the landowner deals expense to contend with. exelusivey with reputable firms it must always be remembered which have a reputation for that unless an exploring company "goods satisfactory or money can put together substantial refunded". blocks of land, development will When leasing with such a firm be retarded because the ex- the landowner can do nothing but ploring company cannot risk the benefit because his farm has a work necessary for a discovery if new income from rental at least they do not control enough land. By JACK RIDDED MPP Huron-Middlesex It has been quite apparent over the past few weeks that various Oil companies are very much interested in leasing the oil and natural gas rights from farmers in Southwestern Ontario, Having been contacted by a number of farmers, asking numerous questions about the leasing of oil and gas rights, I offer the following comments which might be taken into consideration before the farmer makes a decision. The decision to sign or not to sign an oil and gas lease is a purely business consideration. It would not be unlike a decision as to whether or not to invest money in stocks. It is a speculative in- vestment. Signing a lease does not involve the transfer of money, Instead it is a transfer for a consideration of some of the