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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 The Battle For First Place Continues Support the Hawks OHA. Jr. `D' Hockey Feb. 13Th Belmont VS Exeter 8:00 p.m. Tues., Feb. 15 Mitchell VS. EXETER L 8:45 p, 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 companies Gook at Ont, oil rights withdrawn and only the surface time and from area to area.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 gu rel I an far tha cu mu ow rec roy unl res A wh ZURICH ARENA J ea BENEFIT DANCE for Mr. & Mrs. Murray Najjar Fire Victims Sat., Feb. 12, 1977 Crediton Community Hall 8-1 Music By The Silver Strings Lunch Provided 18 Yrs. &,Over Only 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. Homemade Head Cheese Fresh Pork Hocks Sauerkraut Large Ring Bologna Blue Ribbon Bologna From The Freezer Boston Blue Fish lb. 894 Ib. 494 754 Ib. 99+ by the piece Inquire about prices on sides and quarters of Local Feed Lot Beef. We will cut and wrap to your specification CUSTOM SLAUGHTERING BEEF MONDAY — PORK TUESDAY i Laporte MAIN ST. ZURICH 236-4962 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