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Tuesday, January 19, 2010

How Do PA Gas Lease Bids Compare?

Pa. bids for shale-gas land lower than elsewhere

By Andrew Maykuth

Inquirer Staff Writer

On the same day last week that Pennsylvania received bids averaging more than $4,000 an acre to lease state forests for natural-gas drilling, the city council in Fort Worth, Texas, approved two gas leases on municipal land.

Fort Worth got $5,233 an acre - 30 percent more than the Pennsylvania Department of Conservation and Natural Resources did.

Though Pennsylvania officials were ecstatic about the bids last week for 32,000 acres of public land, Chesapeake Energy Corp., one of the successful bidders, agreed four years ago to lease 18,000 acres of the public land beneath Dallas-Fort Worth International Airport for $10,000 an acre, 150 percent more than Pennsylvania got.

The airport is getting a 25 percent revenue-sharing royalty on all gas produced from the leasehold. Pennsylvania: 18 percent.

Prices fetched by landowners in Pennsylvania's Marcellus Shale are turning heads here, but they don't always measure up to the bonus payments and royalties paid to landowners in comparable shale-gas plays in Texas and Louisiana. More...

2 comments :

Anonymous said...

One must remember that you are in a completely different Regulatory environment where it costs much more to permit, drill, purchase and dispose of water and operate. You can't complain that Regulations are not stringent enough and yet complain when lease payments aren't as high as southern states.

Anonymous said...

7:48 You are totally correct. More regulations = more company expenditures = lower bids for rights' holders. On the flip side it's an indication of better written leases that contain more safeguards for our environment, and a wiser developmental plan for our resources ... so the resources become no "flash in the pan" but a promise for a long successful future.