Posts Tagged ‘Lehman’

By CAMILLE FIOTI Times Leader Correspondent

LEHMAN TWP. – Several residents worried about the effects of natural gas drilling attended Monday’s board of supervisors meeting hoping to have their concerns addressed.

In January, a hearing was held to vote on a conditional use application to allow EnCana Gas & Oil Co., which is partnering with Whitmar Exploration Co., to drill a vertical well off Peaceful Valley Road.

At that hearing, the zoning board decided to postpone the vote until Monday’s meeting. Board Chairman Dave Sutton told the residents who attended Monday’s meeting that a vote would again be postponed until the state Ethics Commission has made its ruling, and added the board could not address questions regarding the issue.

The Ethics Commission is checking into a potential conflict of interest involving two of the township’s supervisors. The commission ruling is needed to determine whether they can vote.

EnCana gave the board an extension to vote on the matter by May 1.

Once the Ethics Commission makes its ruling, Sutton said, a special meeting would be held in April to vote on the application and to conduct the Board of Supervisors regular meeting. The date and time will be advertised.

In other business, township engineer Ryan Doughton said the Federal Emergency Management Agency (FEMA) is in the process of redoing the county’s flood maps and is converting them from paper to digital format. He said properties that were once considered in the flood plain might not be and vice versa once the maps are completed.

The board also voted to approve the request for a temporary permit to the Wyoming Valley Striders for a foot race on March 31. The race will begin at 10 a.m. at Penn State Wilkes-Barre.

Copyright: Times Leader

Feedback sought on impact on communities and environment as industry explores Marcellus Shale.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

With questions, concerns and accusations increasing with the rise of drilling for natural gas in Pennsylvania, state legislators and officials have been on the road to hear from voters and explain what they’re doing in Harrisburg.

A Senate Urban Affairs and Housing Committee public hearing last week in Bradford County heard about renters being priced out of their apartments by rig workers.

Later that day at a League of Women Voters forum in Scranton, a state Department of Environmental Protection official addressed concerns about a lack of oversight.

State Sen. Lisa Baker, R-Lehman Township, was involved in a Senate Environmental Resources and Energy Committee hearing on drilling wastewater treatment issues on Wednesday in Harrisburg.

State Rep. Karen Boback, R-Harveys Lake, joins the road warriors tonight in Benton, where the Columbia County Land Owners Coalition is hosting informational meetings. Along with Boback will be state Reps. Garth Everett, R-Lycoming and David Millard, R-Columbia, for the three meetings, which are organized geographically.

Boback is “just going to be there to let homeowners know what’s being done in Harrisburg to address their concerns,” spokeswoman Nicole Wamsley said.

Depending on the crowd, the legislators could face either support or hostility about the issue. Anti-drilling groups have coalesced in the region and have organized attempts to voice their concerns at everything from rallies to zoning board hearings.

While drilling for gas in the Marcellus Shale holds the tantalizing promise of economic benefits and jobs for decades, it also raises a variety of environmental issues, most notably the quality and availability of water.

Add to that concerns such as the practice of “forced pooling.” In theory, it’s designed to minimize surface disturbances by evenly spacing well pads over an entire drilling area and protect landowners from having their gas siphoned off without compensation.

In practice, it forces landowners into leases whether they want one or not.

Legal in New York, it’s being addressed in Harrisburg. Boback had supported a bill based on the land-conservation premise, but recently retracted it “when the questions arose … based on discussions with research staff” regarding its practical application, Wamsley said.

Copyright: Times Leader

Municipality’s planning board has recommended approving a plan to drill a test gas well.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

LEHMAN TWP. – After more than a year of rising interest in the Marcellus Shale just outside the county, Lehman Township supervisors will in January set the tone for natural-gas drilling in Luzerne County.

On Monday evening, the township’s planning board recommended approving a plan to drill a test well at a Peaceful Valley Road site. The vote on the conditional use now goes before township supervisors at their Jan. 20 meeting, at which they will also consider local concerns about groundwater contamination and road damage.

“To the planning (board), it appeared that EnCana … answered those questions adequately,” said Raymond Iwanowski, the vice chairman of the board of supervisors, who was at Monday’s meeting. “As supervisors, we’re pretty united on this. We want to do it right.”

The plan was proposed jointly by Calgary, Canada-based EnCana Oil and Gas and Denver-based WhitMar Exploration Co., which are partnering on exploratory drilling in the county.

If indications from three test wells are positive, the companies plan to expand operations. If not, their leases put them under no further obligation.

Along with the Lehman site, they have identified single sites in Fairmount and Lake townships. Neither of those municipalities has planning boards, so consideration and recommendation of those plans transfer to the county’s planning commission, which is expected to address them on Jan. 5.

With environmental damages and health concerns in connection with gas drilling in Dimock Township, Susquehanna County, making news throughout the year, Iwanowski said groundwater protection is a “also an eye-opener than we have to be vigilant so that that doesn’t happen here,” though he noted that those issues involve a different gas company.

“There are other safeguards that EnCana and Chesapeake and other companies use to alleviate those problems,” he said. “I feel much better about the drilling process than I did a year ago. I was born in the coal mine era. What I don’t want is another coal-mine rape of the land and leave.”

EnCana isn’t without its environmental controversies. It’s currently the focus of an investigation into contaminated water supplies near gas drilling in Pavillion, Wyo.

To ease concerns locally, the drillers are going beyond state regulations. They’re performing baseline groundwater testing for properties within a mile of drilling sites and promise to remediate contamination caused by drilling.

Regarding roads, the company is willing to bond any road required by the township and make contributions for maintenance, said EnCana spokesman Doug Hock.

Copyright: Times Leader

Community partnership members worry about road deterioration, water supplies.

By Rebecca Briarbria@timesleader.com
Staff Writer

DALLAS TWP. – Lehman Township Supervisor Doug Ide informed members of the Back Mountain Community Partnership Thursday afternoon at Misericordia University about the latest natural gas drilling news in the area.

The BMCP is an inter-municipal group composed of Dallas, Franklin, Jackson, Kingston and Lehman townships and Dallas Borough.

Ide attended a public information session by EnCana Oil and Gas Tuesday at Lake-Lehman Junior/Senior High School. He and the other Lehman Township supervisors have also met with EnCana representatives.

Ide says he learned WhitMar Exploration Company has leased 24,000 acres of property in the northwestern part of Luzerne County, mainly on the north side of Route 118 in Fairmount, Ross, Lake and Lehman townships.

“The gas drilling is going to be here in the Back Mountain,” said Al Fox, BMCP president. “I thought it was quite alarming to hear the other day that 800 people signed up.”

According to Ide, EnCana, which will do the drilling, hopes to form two exploration wells in the county – one in Fairmount Township and one in Lehman Township – if they receive the required permits. The wells will prove whether there is natural gas in the area.

Ide says EnCana is willing to bond any road the township requests. Road deterioration and traffic from heavy trucks and machinery has been a common concern among the BMCP.

“We’re going to set some conditions on some roads we do not want traveled, specifically Old Route 115, Hillside Road,” Ide said.

BMCP officials decided to invite representatives from EnCana to speak at the group’s January meeting.

In February, the BMCP will invite back Brian Oram, a geologist and Wilkes University professor, to discuss what the municipalities should do to safeguard their drinking water and other issues related to drilling.

Oram spoke at the BMCP’s September meeting and briefly touched on water’s involvement in natural gas drilling.

In other news, the BMCP approved each member municipality to contribute $300 each to the group’s proposed 2010 operating budget. The budget is to cover general government administration costs.

Copyright: Times Leader

EnCana Corp. will work with WhitMar Exploration Co. in seeking gas in the Marcellus Shale in the region.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

EnCana Corp., perhaps the largest natural-gas producer in North America, has chosen Luzerne County as its entry point into the Marcellus Shale, thanks to an exploratory agreement with WhitMar Exploration Co.

WhitMar, a Denver-based exploratory company, has already leased about 25,000 acres in Columbia and Luzerne counties, including in Fairmount, Ross, Lake, Dallas, Lehman, Jackson, Huntington, Union, Hunlock and the northwest corner of Plymouth townships.

However, it doesn’t have the resources to develop the entire leasehold, so it went looking for a partner. It found EnCana, a Calgary-based company with U.S. headquarters in Denver that produced 1.4 trillion cubic feet of natural gas in 2008, according to its Web site. For comparison, Chesapeake Energy, another industry leader with a local presence, produced 839.5 billion cubic feet that year, according to its 2008 annual report.

Spokesman Doug Hock said EnCana has no other interest in the Marcellus Shale, a ribbon of gas-laden rock about a mile underground that stretches from upstate New York into Virginia but centers on Pennsylvania.

The agreement, however, only commits EnCana to the two exploratory wells WhitMar has agreed in its leases to create, Hock said. “Further activity will really depend on the results of the first two wells,” he said. “The first couple wells that we’re drilling are really to prove it up and ensure that we have viable program there.”

Both wells, while exploratory, will also be put into production, he said, though it’s unclear where pipelines will be installed to connect the wells to regional gas lines.

The deal gives EnCana 75 percent interest in the leasehold and control as the operator, according to WhitMar spokesman Brad Shepard. “Being an exploration company, we’re a small company,” he said. “At least in the Marcellus, we get a partner to develop it with.”

He said there were several companies interested, but that EnCana was “the best fit” thanks to similar interests in testing, drilling and size of the project.

Both companies are also interested in increasing the acreage in the leasehold, he said. Within the area the current lease encompasses, there are perhaps 25,000 to 30,000 acres that aren’t leased, Shepard said. “What we’re trying to do now is basically trying to infill all the land that we have now,” he said.

According to Hock, EnCana, whose business is currently 80 percent gas production, is in the process of splitting the company into two “pure plays” to “enhance the value” of each: EnCana, which would focus entirely on gas, and Cenovus Energy Inc. to oversee its oil-sands operations in Canada.

“We’re in that process right now,” Hock said. “The deal is expected to close at the end of the month.”

EnCana slid on the New York Stock Exchange this week, from $59.40 per share on Monday to $56.11 on Friday.

Both companies are also interested in increasing the acreage in the leasehold.

Copyright: Times Leader

CAMILLE FIOTI Times Leader Correspondent

LEHMAN TWP. – Chris Miller of Jackson Road voiced concerns Monday about the effects of possible gas drilling in the township.

“I am not opposed to gas drilling,” he said told the township supervisors at their meeting. “I am concerned and vigilant about what gas drilling can do to our special community if we do not properly plan.”

He commended the board for passing the Growing Greener ordinance last year that was adopted to help preserve natural, open space in the township.

“Many of us who live here do so because this is a wonderful community,” Miller said. “Our kids can breathe fresh air. The water is clean. There is plenty of forest to hike and hunt in and streams to fish in,” he added.

Supervisor Ray Iwanoski said the board is also concerned; however, the state, not the township, has control over drilling. Drilling hasn’t started in the township, but a number of leases have been issued, Supervisor Dave Sutton said.

“I’m also not opposed to drilling,” Sutton said. “But the township’s initial concern is damage to the roads.” Large trucks hauling machinery and polluted water used in hydraulic fracturing – the type of drilling used to stimulate the release of natural gas from the Marcellus Shale – will take a toll on the township’s roads, Sutton added.

Iwanoski said the board plans to meet with representatives from Whit Mar, the Denver-based firm that has a hold on the area’s gas leases.

In another matter, Sutton addressed complaints made by several Oak Drive residents at last month’s meeting regarding the condition of their road. Sutton said the residents complained that their road is riddled with potholes and is dangerous to drive on.

“There was a lot of exaggeration at the last meeting,” he said. He said he tested the road on his way home from that meeting. “The road is very safe. It was very easy to drive.”

Iwanoski added the road didn’t qualify for a state grant to pave it. He said the road crew patched the potholes the day after the complaints were made.

Copyright: Times Leader

Growing number of landowners hope to gain income by allowing gas drilling on their property.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

FAIRMOUNT TWP. – Scarring Michael Giamber’s 74-acre forested spread with gas wells and pipelines might seem like a nightmare to some, but that’s the fairytale ending for which he’s hoping.

Giamber is part of a growing number of landowners in Northeastern Pennsylvania who have leased their land for drilling in the Marcellus Shale, a gas-laden layer of rock about a mile underground that runs through the northern part of the state. They hope to collect not only lucrative bonuses paid upfront for signing a lease – one offered locally last week was $5,750 per acre – but long-term income from royalties on the gas pumped from their property and rent from hosting needed infrastructure.

Early estimates for some properties put earnings well into the millions of dollars over the life of their gas deposits.

Giamber isn’t necessarily expecting that, but he wants to give his property every chance to succeed. He signed a lease with Denver-based WhitMar Exploration Co., which has locked up more than 22,000 acres in, among other places, Fairmount, Ross, Lake, Lehman, Union, Hunlock, Huntington and Dallas townships. The company offers a relatively negligible sign-up bonus – $12.50 per acre – in exchange for 19.5-percent royalties, a short lease period and stipulations that require expedited permitting and drilling.

“As we all know, the real money is in the gas royalties, not the bonus money,” Giamber noted. “Getting a well with a 20-percent royalty is better than a high bonus and no well.”

Opponents of drilling, however, cite a slew of potential environmental indignities from overt destruction of bucolic rural lands to more insidious but less-proven threats, such as groundwater contamination, overuse of regional water supplies and geologic shifting that might cause earthquakes.

Giamber sees much of that as hypocritical moralizing, and he has but to look down his road for an example of it. Every time he drives from his yard to state Route 118, he passes what he calls a homemade scrap heap on a neighbor’s property that’s filled with abandoned cars, rusted appliances and other items long beyond their usefulness. “It blows my mind how they just abuse the land, and now we’re going to bring in some money, and they get all up in arms,” he said.

If people truly cared about the earth, he reasons, they’d be outraged by such overgrown trash piles. But it’s been there for years, and no one’s complained about it. There are no doubt more just like it, too, he says.

In fact, in that context, Giamber sees his use of the land as beneficial. At least it has a positive purpose – providing a cleaner alternative to oil and coal, creating jobs and providing wealth – instead of just being a place to throw trash.

That said, Giamber has reservations. A few months ago, he visited a well site in Susquehanna County, where he found natural gas bubbling from the watery area at the base of a wellhead. He was told by a WhitMar representative that another company had made a mistake that wouldn’t happen in their work. “We’re all trying to rationalize it right now, and not get upset about it.”

While not necessarily an issue, recent lease agreements as close as Wyoming County make his deal look “anemic,” Giamber acknowledges. Chesapeake Energy, one of the largest companies in the industry, announced last week an agreement with the Wyoming County Landowners group for a 5-year, 20-percent royalty lease with a $5,750 sign-on bonus.

A landowners’ group near Giamber, the South West Ross Township Property Group, says it’s in talks with an undisclosed company whose offer is in the same “ballpark,” according to Ken Long, a member of the group’s executive committee. Long would neither confirm nor deny that it’s Chesapeake.

Still, Giamber believes the math of his deal could work better. “The fat lady hasn’t sung yet,” he said in an e-mail. “Let’s say I get a well three years before my neighbor that signed with Chesapeake at $5,500 (per-acre bonus). I’m still ahead. The variables are many and the future too hard to predict. I am just happy that WhitMar is moving forward by drilling the first wells in Luzerne County.”

Copyright: Times Leader

Firm with substantial holdings in Luzerne County taking next step toward exploration.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

WhitMar Exploration Co., the only gas-drilling company so far to have leased substantially in Luzerne County, plans to begin drilling by the middle or latter part of next year, according to the company’s president.

“Right now, we’re just filing for some permits for two, possibly three wells we want to drill,” said Whit Marvin, who heads the Denver-based company. “We do plan on drilling it and testing it for the Marcellus Shale.”

Throughout 2009, WhitMar has leased more than 22,000 acres in, among other places, Fairmount, Ross, Lake, Lehman, Union, Hunlock, Huntington and Dallas townships with little money upfront by offering landowners a contractual guarantee to begin drilling within two years.

The contract also guaranteed permitting within the first year, and Marvin said that process is on track. The company is filing for drilling and water-consumption permits from the state Department of Environmental Protection and the Susquehanna River Basin Commission, and is looking into any other permits it might need, he said.

From there, the company will negotiate with the individual landowners about siting for the well pads and gaining access to them, he said.

Much of that will be based seismic testing that’s being done, the results of which Marvin expects before the end of the year. “In essence, you’re using ultrasound. You’re looking for anomalies under the surface … that would be attractive to drill into,” he said. “We can make some geologic interpretation, (but) it’s definitely not an exact science.”

A drilling contractor hasn’t been hired yet, he said, but the company has begun work elsewhere in the shale. It has leased “large blocks” in Lycoming, Wayne and Susquehanna counties, as well as in some counties in New York’s southern tier, he said. Of that, wells are being drilled in Chemung County, N.Y., and preparations for drilling are being made in Susquehanna and Lycoming counties, he said.

In Lycoming County, the industry is moving so fast that companies needing and offering services aren’t able to connect, according to Jeffrey Lorson, an industrial technology specialist at the Pennsylvania College of Technology.

For that reason, the college and a group of organizations interested in the industry are sponsoring a business-networking expo today. Lorson, who heads the college’s Marcellus Shale Education & Training Center, said about 130 vendors are scheduled to be at the free-admission event at the Hughesville Fairgrounds.

If you go

What: Business-networking expo for the gas-drilling industry

Where: Hughesville Fairgrounds, Lycoming County

When: Today, 10 a.m. to 3 p.m.

Description: About 130 vendors are meeting to display their goods and services, and to see the goods and services other companies are offering.

Rory Sweeney, a Times Leader staff writer, may be reached at 970-7418.

Copyright: Times Leader

Some landowners holding back, banking on economic improvement to bring better offers from drillers.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

The offer is somewhat unconventional, but a natural gas company that’s leasing land in Luzerne County says its deal is a successful compromise for both parties, and leaseholders agree.

Denver-based WhitMar has locked up more than 22,000 acres in, among other places, Fairmount, Ross, Lake, Lehman, Union, Hunlock, Huntington and Dallas townships, according to company representative Brad Shepard.

The company is offering an unusual deal that has garnered both accolades from landowners for navigating the money squeeze caused by the recession and criticism for its lack of a long-term commitment. WhitMar, which Shepard said is involved in similarly complicated and expensive drilling operations in Oklahoma, Arkansas, Louisiana, Utah and the Dakotas, is offering a four-phase lease.

Landowners receive $12.50 per acre for the first year, after which the company decides whether it will continue the lease for a second year at the same payment rate. The lease also requires that within the first year the company begin the permit process for drilling at least one well and within the second year begin drilling at least one well.

For the third year, the company will offer a $2,500-per-acre, five-year lease on the properties it wants to keep, and landowners whose land gets drilled also will receive 19.5-percent royalties. Conservation Services, the company that amassed most of the territory, receives .5 percent of the royalties.

“As far as I know, that’s the highest royalty that’s been signed in Pennsylvania or New York,” Shepard said. “The reason we offered that royalty is literally because the landowners were willing to let us come in and test it up for $12.50” per acre.

The company then retains an option for a second five-year, $2,500-per-acre lease. “All together, it could be a 12-year lease,” Shepard said, but noted that the leases dissolve if the landowners aren’t paid. “So if they don’t receive a $2,500 payment or a $12.50 payment, the lease has expired because we didn’t pay them like we said we would.”

The offer has aroused reactions on both sides among affected landowners. Some urge restraint, predicting that better offers will crop up when the economy rebounds. “Right now, (gas companies) are picking all this low-hanging fruit,” said Ken Long, an executive committee member of the South West Ross Township Property Group that declined to recommend WhitMar’s offer to their group. “People are panicking to sign leases … because they want to get this monkey off their back.”

Landowners who signed leases note the generous royalties and the commitment to quickly begin exploration drilling. “I firmly believe that a sweeter, more lucrative deal can not be found in Luzerne County,” leaseholder Michael Giamber noted in an e-mail. “By comparison, the folks in Dimock (a truly proven area) can only get 18 percent. Over 30 years, a 2-percent difference in royalties can literally add millions of dollars in a landowner’s pocket.”

Shepard added that forced drilling likely means additional drilling will occur. “For the most part, once the drill rig’s brought in, it’s not brought in to drill one well,” he said. “As long as they hit, we have every intention of drilling as quickly as we can and our partner wants us.”

The company is still working out important specifics, though. First, it needs to find a larger partner to help drill, Shepard said, and it also must secure the rights to millions of gallons of water for the process that cracks the underground shale and releases gas.

In nearby counties, the company is working with Houston-based Carrizo Oil & Gas, Fort Worth-based XTO Energy, Inc., Louisiana-based Stone Energy Corp. and others, Shepard said.

He added that the company has received many offers from landowners to sell surface water on their properties, but said the company is not yet at the stage where it’s investigating water-acquisition options.

Rory Sweeney, a Times Leader staff writer, may be reached at 970-7418.

Copyright: Times Leader

Company files documents to drill in Luzerne County, has leased 17,500 acres.

By Jennifer Learn-Andesjandes@timesleader.com
Luzerne County Reporter

Natural gas drilling may be about to boom in Luzerne County.

Denver-based WhitMar Exploration Co. recently submitted 200 lease documents to ensure that they have the correct property identification numbers, or PINS. Pin certification is required before the leases are officially recorded in the county recorder of deeds office.

The documents show the company has acquired drilling rights on 5,440 acres in Harveys Lake and the following townships: Ross, Lake, Lehman, Fairmount, Union, Huntington and Jackson.

WhitMar representative Brad Shepard said the company has leased 17,500 acres in Luzerne County to date, with more planned. Shepard said he was too busy with planning meetings Tuesday to explain how the drilling will be executed.

Beth Chocallo, a Lake Township property owner who agreed to lease her 3.29 acres to WhitMar, said she and her husband, Richard, were connected to WhitMar through a seminar.

The couple did not receive any upfront payment, she said. Instead, WhitMar will pay a lease rental after the first year or two and a percentage of the profits if natural gas is extracted, Chocallo said.

Chocallo she is optimistic that gas will be found because she doesn’t believe WhitMar would invest in the time and expense of preparing leases without a strong likelihood.

“Who knows where the gas pockets will be found? It’s not a definite,” she said.

WhitMar plans to grid out territories, paying a profit percentage to the owners of all leased property within that grid if gas is extracted, Chocallo said.

She does not believe a drilling rig will be installed on her property because the parcel is on the smaller side compared to others being leased, but she can’t rule out the possibility. Her main concern was that drilling would cut off or diminish her water supply, but she said WhitMar assured her that the company would replace the well and furnish water if that happens.

The lease documents filed in the county do not contain any details about what will be paid to the property owners.

Property owners are leasing WhitMar the exclusive right to explore for and develop oil and gas, the documents say.

That right includes use of the property for the drilling of oil and gas wells and installation of roads, pipes, pumps, compressors, separators, tanks, power stations and any other necessary equipment, the documents say.

Most, if not all, of the leases are for one year, with the option to extend for an additional 11 years or longer.

Of the 200 leases, Fairmount Township had the most property signed with WhitMar – 2,512 acres – followed by Ross Township with 1,205 acres.

Here’s a breakdown of the other leased acreages: Harveys Lake, 58; Jackson Township, 99; Union Township, 102; Huntington Township, 361; Lake Township, 463; and Lehman Township, 640.

Founded in 1979, WhitMar is a private energy operation actively engaged in drilling and developing natural gas and oil prospects in the United States, according to the company’s Web site.

Jennifer Learn-Andes, a Times Leader staff writer, may be reached at 831-7333.

Copyright: Times Leader