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'Checks' in the mail give away gas rights

Several residents receive mailings

MIDDLESEX TWP — Luckily, Darlene Weinzetl read the small print when she received two “checks” in the mail from the Cobra Petroleum Co. of Fort Worth, Texas.

“‘Cobra’ is right,” Weinzetl said. “What a snake in the grass.”

She said she and more than 40 of her neighbors who have shale gas leases with Rex Energy got the mailing from Cobra Petroleum with draft payment in amounts ranging from $40 to five-digit sums.

But if the bank drafts are signed, that turns all mineral and royalty interest over to Cobra Petroleum.

A woman at Cobra Petroleum who answered at the telephone number listed on the mailings said a letter that comes with the documents explains that signing relinquishes the recipients gas and oil rights.

She would not identify herself, and company owner Mark Beatty did not return calls from the Eagle.

A letter attached to the bank draft with the greeting “Dear Interest Owner” tells the recipient that Cobra Petroleum wants to buy his mineral interests, and a copy of the deed that details the recipient’s lease is enclosed in the mailing.

The last line of the letter advises those with questions about conveying their mineral and royalty interests to contact their attorney or to call the Cobra Petroleum Co. at the Texas phone number listed on the letter.

But Weinzetl said elderly leaseholders or those who assume their leasing company changed names may think the bank draft is a royalty check and accidentally sign over their mineral rights and gas royalties.

Weinzetl, who is a former Middlesex Township supervisor for 12 years, said she called the number on the letter and asked the woman who answered if signing the bank draft meant that Cobra Petroleum would take over their mineral and oil rights as well as rights regarding wells being drilled.

“She said ‘That’s right,’ and I said ‘Thank you, goodbye,’” Weinzetl said.

Butler County District Attorney Rich Goldinger said that while mailing an item that looks like a check written out to a specific individual, but which signs away the property owner’s rights, is not a criminal offense, the recipient may have civil recourse.

But he said it may cost more in court and attorney fees to fight the conveyance than the recipient would get from the buyer or through the profits from a lease.

Goldinger said he does not agree with this technique, and gave several pieces of advice on the matter.

“If you get lots of money in the mail, don’t just sign the check,” Goldinger said.

He said recipients should check with their attorney or call the company for more information if they receive a mailing that appears to be a check.

Goldinger also advised leaseholders to check with the drilling company that holds their lease if a check arrives from another company.

“If it appears too good to be true, it usually is,” Goldinger said.

A representative of the Pennsylvania Utilities Commission said that agency does not cover gas leases.

Mary Ann Fox, vice president for land at Rex Energy, said in a statement, “This company is not affiliated with, nor operating on behalf of, Rex Energy. In the event that mineral owners who have executed a lease agreement with Rex Energy receive correspondence related to their lease, we would encourage them to consult with legal counsel prior to executing any agreement.”

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