Posts Tagged ‘Joe Umholtz’

Experts tell landowners to understand everything they are signing related to leases.

LEHMAN TWP. – Natural-gas drillers seem to be taking “a wait-and-see attitude” right now, according to Ken Balliet, a Penn State Extension director well versed in gas-lease issues.

If exploratory wells being drilled this summer are productive and some state regulatory issues are ironed out, gas-lease offers could jump, he said.

But as anticipation builds over natural-gas drilling in the region, here’s one thing landowners can expect.

“As soon as you sign a lease, in a few days or weeks, the price (others sign leases for) is going to go up,” Balliet said. “You’ve gotta understand this is still a highly speculative play.”

That said, landowners have many other issues to consider beyond the bottom line, according to other experts who spoke at a gas-lease workshop on Monday evening at Lake-Lehman High School. There are environmental, liability, property rights and payment issues that should be considered.

For Luzerne County landowners who are undergoing property reassessment, another concern is retaining the land’s “clean and green” tax abatement status. Dale Tice noted that the financial risk could be transferred to the drilling company. Tice, an oil and gas attorney, said an addendum could be added to leases to require drillers to pay any rollback taxes.

Another important lease consideration for farmers is making sure the drillers isolate the topsoil during excavation, pointed out Joe Umholtz, an oil and gas program manager with the state Department of Environmental Protection. DEP doesn’t have a regulation requiring that, he said.

Tice also mentioned inserting compensation clauses for crop loss and land damage.

Beyond soil and groundwater pollution or water usage, landowners should consider the sound pollution from compressor stations and other machinery.

While all the issues probably won’t deter wildlife indefinitely, drillers can arrive at any time of year, so owners should prepare accordingly for hunting seasons, the experts said.

Regarding payments, owners should be aware that companies currently deduct transportation costs for getting the gas to market, Tice said, but legislation is pending to ban that. Also, while companies might offer owners the opportunity to use as much gas as they want, the pressures involved make it practically unreasonable, so Tice suggested that owners negotiate for payments in lieu of the gas.

It’s also important, he said, to restrict lease rights to only what might come up from the well because a broader lease might allow extraction of other minerals.

Finally, he advised against allowing options to re-lease land, but instead offer the first right to refuse a new lease offer.

“If they drill a well, that means you’ve got one chance to get this lease correct. You need to be sure you understand everything you’re signing,” he said.

Copyright: Times Leader