Shale shock 

Drillers' rights top landowners.

Problems related to natural gas drilling are well known here in Arkansas. Ever since companies moved in to exploit the Fayetteville Shale several years ago, residents have complained about dirty water, the number of semi trucks running up and down their small country roads, the methods used to dispose of drilling waste and the noise created by drills and compressor stations. All bad stuff for sure, but all in the name of job creation and royalty payments.

But what most people still may not realize is that if they don't own the mineral rights to their land, and the gas company does, there is nothing they can do to stop the gas company from setting up a drilling operation on the property.

Because of the way land has been acquired in Arkansas over the years, many landowners own only the surface rights on their property. But Arkansas law makes the mineral estate dominant to the surface estate. Otherwise, those who hold the mineral rights would never be able to extract the minerals. It's a concept that's becoming more and more familiar to Paul and Ashley Yanke.

"Chesapeake [Energy] came out here about two and a half months ago and said, 'We're putting a pad there,' " says Paul Yanke. "So I asked him, in not so eloquent terms, 'So you're here to tell me we're effed?' And he said, 'Yes, we're putting the pad right there.' "

"Right there" was in the middle of a horse ranch near Mount Vernon, in Faulkner County. It's beautiful land, with long sloping green fields, big old oak trees and a couple of streams running through the middle of it all. The couple bought the land seven years ago and built their dream house, along with a slowly but steadily growing business taking care of horses and rehabilitating their injuries. It's peaceful and quiet, which is exactly why they bought it. Or at least it used to be.

"We have over a million dollars worth of horses in that pasture that aren't ours," Paul Yanke says. "Most of these horses have been in stalls or on the road their entire lives. We have one that's 17 years old that needs some mental rehabilitation. This is a resort for them. So it's going to be no more resort. It would be like sitting at the bar at Club Med and have someone hammering something right next to you."

The Yankes are worried about what damage might ultimately be done to their property, but most of all they're worried about their business. What was a quiet place for the animals has turned into what the Yankes call a "war zone."

"Do you think if people that had these expensive horses here knew, do you think they would want their horses around this?" Ashley Yanke asks. "There are always people out there and there's always something going on. That's why these horses are here: to get away from that."

The Yankes did what they could to keep Chesapeake off their land, hiring a lawyer and trying to at least come away with some concessions. It was a losing battle. After being told by their attorney that signing the contract offered by Chesapeake was their only option, Paul Yanke said his wife did so reluctantly and while in tears.

Bulldozers rolled onto their property about two weeks ago and within a matter of days a rig was up on their land complete with all the trailers, trucks and traffic that go along with it.

Litter has also become a problem. Paper fast-food bags, Coke bottles and aluminum cans now line the road leading to the gas well pad, prompting one neighbor to put up a cardboard sign that read, "Pick your trash up fucking gas field!"

"It's unbelievable," Paul Yanke says. "It will never be the same. It's going to mess up the creek and everything. And how about the land? How are we supposed to sell this place? Who would want to live here with a pad on their place?"

"We just feel like we were being tricked throughout this whole process," Ashley Yanke says. "I'm still stuck on the fact that when property is sold then the minerals aren't yours. It should go with your property."

And that's a common sentiment, says Cliff McKinney, a Little Rock attorney who specializes in real estate law.

"Most people don't even realize it," McKinney says. "Even if you do a title search on your property and look at the previous history of it, unless you go all the way back, you might not even know that somebody owns your mineral rights. I tell my clients you should assume you do not own your mineral rights."

The record of what happened to most people's mineral rights can go back as far as 200 years. In the 1800s railroad companies owned a lot of land in Arkansas and often held on to mineral rights once they sold that property.

"Railroads got paid by the government in land. If they would agree to extend a railroad to a certain area, the government would give them land in exchange. And the railroads would sell that land off and that's how they made their money. When they sold it off, they sold the surface rights, but they reserved the rights to any minerals under that property," McKinney says.

So how do you know if you own your mineral rights or not? Well, finding out isn't easy and it will cost you, usually somewhere around $2,000, to know for sure. All the documents are stored in the county records, so theoretically you could find them yourself. However, doing so is easier said than done.

"The records are kept in such a way that it's really hard for an individual to look that up," McKinney says. "It's particularly difficult because you're talking about records that go back to the 1800s. Sometimes they're hard to read, or they're indexed in such a way that's difficult to find. There are legal descriptions which the average person can't read."

The best solution, McKinney says, is to hire a landman (or land woman), someone who performs these types of searches for a living. They can be found using a Google search of the county name and "landman."

However they did it, Chesapeake and other drilling companies have found out who owns mineral rights in the Fayetteville Shale and acquired them.

Landmen, lawyers, gas companies. The Yankes feel like the deck is stacked against the common landowner.

"Everybody except for the gas company is the little guy," Paul Yanke says. "We were going up against a 10,000-pound gorilla with unlimited funds. They have lawyers on staff. It's insurmountable. We're fortunate that we have more resources than a lot of other people in the area, but they could bleed us dry. When you're a multi-million dollar company you can easily bleed a homeowner dry."

And they're not alone. Teresa Collinsworth is a nurse who lives near Conway. She's lived on her 10 acres, half of which is now taken up by a gas well pad, for the last 13 years. She and her husband signed a lease agreement with Chesapeake to set up a well pad on their property and begin to drill after representatives from Chesapeake initially said the couple owned the mineral rights. Then the drilling began. When the royalty payments never came, she began to get suspicious.

"We already had three wells that were pumping and weren't getting anything from them and we couldn't figure out why. When we called them they said that under further investigation we didn't have our mineral rights," Collinsworth says.

"It looks like some of our mineral rights were purchased a month before they came back and signed with us. So during their investigation to see whether or not we owned the mineral rights, it looks like they purchased some kind of mineral rights. It's just the screwiest thing I've ever been through. They're conning people is what they're doing."

The Times tried to get in touch with representatives from Chesapeake numerous times, but requests for interviews and more information regarding their practices were ignored.

"I mean, I'm an educated person," Collinsworth says. "But when it comes to this kind of stuff, they have their trickery ways, and they do things legally, but they're tricking people is what they're doing. People need to know there are lawyers out there that deal specifically with this stuff. We didn't know there were mineral rights lawyers out there. When these people start approaching you, then you need to get somebody to handle this business for you."

And that really is the best thing to do, McKinney says.

"The law in general is such that it's very hard for individuals who don't have legal counsel to work their way through the system. The best thing you can do is consult with a lawyer. A lot of lawyers, if you call them up, will talk to you on the phone for free. Or a consultation will cost a couple hundred dollars. I've had to give a lot of clients the bad news that 'I'm not going to be able to help you here, or we're going to have to spend a lot more money.' "

Aside from legal counsel, there's really no one else to turn to. After Paul Yanke was contacted by Chesapeake, he called Sen. Blanche Lincoln's office to see if there was anything that could be done. The senator's office told the Arkansas Oil and Gas Commission about the situation, but the commission has little authority in these matters.

"Usually when someone contacts their senators, they refer them to us or ask us to look into it," says Shane Khoury, Arkansas Oil and Gas Commission deputy director and general counsel. "In most cases like that, that's not an area where the commission has any authority. The law being the way it is, we can't deny a permit based on a surface owner's complaint."

Ultimately, the Yankes were able to get a few concessions from Chesapeake in their contract, but they're not permitted by the terms of their contract to reveal exactly what those concessions were. The company also paid $10,000, a normal fee for the "reasonable use" of the land. But for the most part, Paul Yanke still feels the contract favors Chesapeake.

"In their agreement, most of the contract is about releasing them from liability and holding them harmless," Yanke says. "Basically, they can do whatever they want and I can't do anything. That worries me because I have a business. I have over a million dollars worth of horses that I don't own. If something happens to them there's no way I can say, oh that's OK, there's no way I'm blaming you, Chesapeake."

"From a business end, we started thinking, okay, what are our options? I mean we still do live in America, so we should be able to have a voice. I don't want their money. I just want them to leave me alone."


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