Leasing out land can be a confusing process.
A Penn State Cooperative Extension program scheduled from 7 p.m. to 9 p.m. on Thursday, August 23 at Jefferson DeFrees Family Center will cover the fundamentals of shale gas exploration and leasing. Cost is $15 per person and $25 after Aug. 22 with registration available at agsci.psu.edu/shale-gas-exploration-leasing/warren or by calling 724-662-3141.
Dan Brockett, Penn State Extension education, has been doing the programs for the last couple years in the western part of the state. He will present on natural gas leasing.
Bryan Swistock, a Penn State water resources extension associate, will talk about gas drilling and water quality. Scott Weikert, Penn State Extension educator, will cover what happens during the development process of unconventional shale.
Ross Pifer, director of the Agricultural Law Resource & Reference Center will go over legal issues. There will also be an opportunity for questions and answers.
"I've had conversations with people in Warren County," Brockett said. "They've asked if it's there yet and it appears the time is now or is coming in the future."
Although the Marcellus Shale band in the county is probably not a major target for gas drilling companies, Brockett said the Utica/Point Pleasant Shale is. Within the next 12 to 18 months, he predicts landowners will be hearing from the companies.
In light of that, Brockett said people need to learn about the impacts they can expect. These include both the financial part and land protections.
"The big thing everyone needs to recognize is some laws in Pennsylvania affect the lease process," Brockett said. "Pennsylvania has a minimum of one-eighth royalty."
Another law requires drilling to have a 500 foot setback from any occupied home. However, most of the things dictating the relationships between the gas company and landowner is in the lease, Brockett said, and is not the the responsibility of the state or the Department of Environmental Protection.
Landowners need to negotiate the best deal they can, Brockett said, and he suspects many of them in the area are familiar with conventional wells. Shale gas wells differ in size and the amount of pipeline required.
"With conventional gas leasing, people are under the impression if the lease is not that great or nothing works out they could do it all over in five years," Brockett said. "With shale, it's probably the last lease landowners sign in their lifetimes."
Whatever they negotiate now, Brockett said, could affect them and their grandchildren for two generations to come. Therefore, he stressed how important it is to be patient and get the best deal possible.
Over the next two years, Brockett said landowners could see available money in the county ranging from $100 million to $150 million. With that much on the table, a lot of people will be lining up to get their share.
"Landowners need to be wary of who they're dealing with and what they're getting for the service they're presumably paying for," Brockett said. "I encourage landowners to learn as much as they can before entering into agreements."
Contracts are very complicated, Brockett said, and gas companies normally have more expertise than landowners. If people want to get into the gas business, he said they have to learn it very well before making decisions which could affect generations of their families.