Marcellus Shale

WGSF Newswire :Marcellus Shale 6/6/2011 A recent advance in drilling technology has propelled Pennsylvania as a potential boom region for natural gas exploration and production. More than a mile beneath an area of Appalachia covering parts of four states lays a layer of rock called the Marcellus Shale containing a mostly untapped reservoir of natural gas that could swell U.S. reserves. The shale holding the best prospects covers an area of 54,000 square miles, from upstate New York, across Pennsylvania into eastern Ohio and across most of West Virginia. In Pennsylvania, most of the prime shale real estate extends from the north-central to the southwestern part of the state.

Pennsylvania, where the Marcellus Shale appears to be thickest, is the heart of the action so far. Many gas-leasing companies have been knocking on landowners’ doors and offering the dream of great profit in exchange for the right to drill. They are rifling through stacks of dusty deeds in courthouse basements to see who has underground mineral rights to the deepest gas formations.

The Pennsylvania Department of Environmental Protection says that drilling permits are up about 25% since 2005 and most of the activity increase can be attributed to wells in the Marcellus. Some estimate that 1,600 wells will be drilled in 2010 alone.

Leasing land to a gas company and allowing a gas well to be drilled on your property can be a risky business, however. Even though tests in a particular geographic area might indicate the presence of gas reserves, allowing a company to drill on your property is speculative, potentially dangerous and could yield nothing.

The drilling process also comes with certain risks to your property and the water supply. There are many questions to be answered: What does the drilling process entail? How close to my home or well can a well be placed? What percentage of the profit is a landowner entitled to? How can I ensure I am receiving the correct amount of royalties? How can I guard against potential damage due to drilling and gas extraction?

There are many potential issues you can negotiate to modify a lease. Those include signing bonus and royalty payments, restrictions on the number or location of wells that may be drilled on the property, site restoration work, protection of the water supply, liability issues and issues regarding pipeline that must be installed on the property.

The negotiation of these terms may be your first exposure to an oil and gas lease. Because of the legal nature of the leasing arrangement, an inexperienced landowner may be at a disadvantage when dealing with a more experienced lessee. No landowner should give up any rights associated with their land unless they are fully informed and completely comfortable with their decision.

Talk to other landowners and learn more about their experiences with exploration and production and the royalties they received. Seek legal counsel from our experienced attorneys before signing an oil and gas lease. A standard form lease offered by a gas company may not offer all that can be negotiated by an attorney experienced in protecting your interests.

Disclaimer: The information contained in this message is provided for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the issues related to a personal injury case. Every individual’s factual situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state.