HomeMy WebLinkAboutZurich Citizens News, 1977-02-09, Page 5By JACK RIDDELL
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
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
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Citizens News, February 9, 1977
Page 5
01! companies Gook at Ont, oil rights
withdrawn and only the surface time and from area to area. In
rights were given to the in- the area of Huron -Middlesex the
dividual owners, standard annual payment of $1.00
An oil, gas or storage per acre is paid as an annual
agreement or lease is an holding fee. In addition most
agreement whereby the Ian- companies pay a minimum of
downer leases to another in- $100 per acre per year for all of
dividual or a Company, his the surface area used in con -
ownership to the oil, gas or 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 -1
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
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
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
arantee if the lessee is not
iable or cannot be found.
f a landowner leases his oil
d gas rights and later sells his
m then he must understand
t the lease goes as an en-
mbrance with the title and
st be assumed by the new
ner who in turn is entitled to
eive the further rentals and
alties that the lease earns,
ess the mineralrights are
erved to the former owner.
question that is often asked is
at payment should a Tan-
ner expect for signing a
se. This varies from time to
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J
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.
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SHOULD YOU
'RE -ARRANGE
FUNERAL?
1-n these changing times,
attitudes about funerals are
changing too!
Members of the Ontario
Funeral Service Association
find that many show a prefer-
ence for a funeral which is
simple, yet dignified and in
good taste.
The thoughtful head of
every family takes care to
prepare a Will, carry Life In-
surance, etc., with one un-
selfish motive in mind — to "
assure his family of security
and freedom from worry.
Many go further and pre -arrange their own funeral
leaving instructions as to their wishes.
Candidly speaking, should it not be YOUR RESPON-
SIBILITY to make these arrangements so this task will not
be left to someone else?
The Ontario Funeral Service Association believes that
this is a matter which deserves your serious consideration
and suggests that you call on a funeral director and ask
about pre -arrangements. Your enquiry will be in confi-
dence and without obligation.
. WESTLAKE FUNERAL HOME
ZURICH 236-4365
ONTARIO FUNERAL SERVICE ASSOCIATION