Cuomo: Approach gas contracts with caution

John O'Brien Sep. 11, 2008, 2:24pm


ALBANY, N.Y. (Legal Newsline) - New York Attorney General Andrew Cuomo is using his office to caution consumers against what he feels are strong-arm tactics by oil and gas exploration companies.

Cuomo on Wednesday announced guidelines for consumers to follow and will be taking part in the Landowners' Rights Forum Tuesday in Binghamton. He's also planning future similar forums around the state.

"If done properly, including implementing the adequate environmental safeguards, increased natural gas production can be mutually beneficial to the landowners, the economy, and all New Yorkers," Cuomo said.

"However, in the event New York landowners are approached and asked to sign a lease by a gas exploration company or their agents, they should proceed cautiously, as the process can be rife with potential peril. Consumers must be aware so they do not fall victim to any abusive or misleading tactics."

Cuomo said he investigating a significant number of complaints from landowners who believe companies are misleading them.

Landowners lease their land to a business that wishes to extract oil and natural gas. Cuomo says those landowners should review each term and condition of the lease with an attorney.

Among other things, he also says to obtain all promises in writing, negotiate for better terms and obtain copies of the lease after it is signed.

According to, the third-highest verdict of 2007 came from a dispute between West Virginia landowners and gas companies. The plaintiffs claimed Chesapeake Energy and NiSource took deductions from royalties and did not reflect it on the royalty statements.

The plaintiffs were awarded $404 million. The state's Supreme Court decided not to hear the appeal, and Chesapeake Energy scrapped its plans to build a $35 million regional headquarters in Charleston.

From Legal Newsline: Reach John O'Brien by e-mail at

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