PROVIDE MUCH-NEEDED REVENUES
TO GAME COMMISSION
In Hamlin Township, McKean County
“When the General Assembly last approved a license fee increase, which took effect in 1999, the expectation was that the revenue increase derived from that increase would need to be revisited in 2004,” said Carl G. Roe, Game Commission executive director. “Now, more than seven years beyond that time, the Game Commission has been able to continue to fulfill its mission by tightening its financial belt and making cuts in programs and services. Some of those cuts have been painful, such as the reduction in the agency’s pheasant propagation program and providing free subscriptions of our monthly magazine, Pennsylvania Game News, to landowners enrolled in our public access programs, schools, libraries and elected officials.
“While this new revenue will enable us to catch up on some of the valuable work that the agency does for wildlife, it is by no means a solution. However, as everyone is facing difficult financial times, we will do our best to make wise spending decisions with the monies entrusted to us by our license buyers.”
Roe pointed out that the revenue from these agreements is equal to what one year’s worth of increased revenue would have been had a license increase been enacted in 2006.
“So, even with this one-time $18 million revenue infusion, we still are four years behind where we should be if a license fee increase had been implemented,” Roe said.
Of the agreements approved by the Board, Roe stressed that two will have no surface impact on the State Game Lands, as all drilling will be conducted from sites already under lease on private properties adjacent to the SGLs.
“This means that in two of the leases approved today, hunters and trappers will see no surface disturbances, while the wildlife mission of the Game Commission will benefit from the much-needed revenues,” Roe said. “Without a proactive approach to lease these State Game Lands, much of the Game Commission’s potential oil/gas revenues would have been jeopardized by adjacent private oil/gas development that could have drained the Game Commission-owned oil/gas reserves from beneath SGLs.
“The ‘do nothing’ option would abdicate our fiduciary responsibility to both our license buyers and the state’s wildlife resources that we’ve been entrusted to manage. As has been the policy of the Game Commission in the past, portions of these upfront proceeds will be used as third-party commitments to acquire more parcels for the State Game Land system and directly support a multitude of wildlife resource management programs throughout the entire state.”
At its April 2010 meeting, the Board unanimously approved a resolution proposed by Game Commissioner David Schreffler urging caution regarding development of Marcellus Shale gas resources on the agency’s State Game Lands system.
The first two leases approved by the Board today are restricted surface use oil/gas production agreements involving two tracts of State Game Land 114 in Anthony, Cogan House and Mifflin townships, Lycoming County.
Anadarko E&P Company LP and EXCO Resources LLC have the ability to unitize and produce the oil and gas owned by the Game Commission under SGL 114 by directional drilling.
Therefore, both of the agreements prohibit any well pad construction or drilling on SGL 114, and further restrict surface uses from infrastructure development on the SGL via pipelines, access roads, and geophysical testing in an effort to prudently develop the Game Commission’s oil/gas reserve, and simultaneously protect the wildlife resources and recreational uses on SGL 114.
The five-year agreements will result in payments and rentals of $8,644,500 that will be deposited into the Game Fund and/or deposited into an interest-bearing escrow account for future purchase of wildlife habitats and lands acceptable to the Game Commission.
All royalties will be directly deposited into the Game Fund. Oil/gas development will be regulated by the Commonwealth’s oil/gas regulations and the Commission’s standard restricted surface use Oil/Gas Production Agreement.
SGL 114 currently contains 2,880 acres in Lycoming County.
The third lease approved by the Board today is a restricted surface use oil/gas production agreement involving 722.3 acres of SGL 172 in Terry and Wilmot townships, Bradford County.
Chesapeake Appalachia, LLC of Oklahoma City, Oklahoma, has initiated well drilling and development programs on private lands adjacent to SGL 172, and has the ability to unitize the oil/gas owned by the Game Commission by developing well sites on private lands and directional drilling beneath the SGL. Therefore, the agreement prohibits any well pad construction or drilling on SGL 172, and further restricts surface uses from infrastructure development on the SGL via pipelines, access roads, and geophysical testing in an effort to safeguard the prudent development of the Game Commission’s oil/gas reserve, and simultaneously protect the wildlife resources and recreational use of SGL 172.
The five-year agreement will result in payments and rentals of $3,611,500 that will be deposited into the Game Fund and/or deposited into an interest-bearing escrow account for future purchase of wildlife habitats and lands acceptable to the agency. All royalties will be directly deposited into the Game Fund. Oil and gas development will be regulated by the Commonwealth’s oil/gas regulations and the Commission’s standard restricted surface use Oil/Gas Production Agreement.
SGL 172 presently consists of 722.3 acres in Bradford County.
The fourth lease approved by the Board today is an oil/gas production land exchange agreement with Endless Mountain Energy, in which Endless Mountain Energy will be given limited access to the Game Commission-owned oil and gas under a 1,930-acre portion of SGL 268 in Morris Township, Tioga County.
In exchange for the oil/gas agreement, Endless Mountain Energy will convey to the Game Commission a 584.78-acre tract of land adjacent to SGL 62, known as the Kane Tract, in Hamlin Township, McKean County. The Kane Tract is valued at $700 per acre. The land is subject to a 10-year timber reservation and an oil and gas reservation. The 10-year timber reservation was developed between the former property owner and the Game Commission’s staff to better benefit the agency’s wildlife goals.
The five-year agreement will result in a total bonus payment of $6,755,000, of which $409,346 will be credited towards the conveyance to the Game Commission of the Kane Tract, and $6,345,654 will be deposited into the Game Fund or an interest-bearing escrow account to be used for the future purchase of wildlife habitats and lands acceptable to the Commission. All royalties will be directly deposited into the Game Fund.
Oil and gas development will be regulated by the Commonwealth’s oil/gas regulations and the Commission’s standard Oil/Gas Production Agreement and a $25,000 performance bond. The Oil/Gas Production Agreement will include the Commission’s standard wildlife and protection measures and further limits well development to a total of three well pads and related surface infrastructure.
SGL 268 currently contains 3,051 acres in Tioga County. SGL 62 presently includes 1,526 acres in McKean County.