Posts Tagged ‘WhitMar’

STEVE MOCARSKY smocarsky@timesleader.com

An attorney and a gas company land man warn that attractive lease offers from energy companies might not always be as generous as they seem.

Kit Akers, lead land man for new ventures at EnCana Oil & Gas, said other natural gas companies could come in throwing around relatively large bonus money offers to Luzerne County landowners if EnCana’s exploratory drilling is successful in Fairmount and Lake townships.

“Sometimes people get blinded by bonus money and aren’t always thinking about protecting themselves in the long run,” Akers said.

Luzerne County landowners might be experiencing bonus envy, considering that gas companies in Susquehanna and Bradford counties are offering $5,000 to $6,000 per-acre bonuses for drilling rights leases while EnCana is offering $2,500.

But Akers said the value of drilling rights in Luzerne County will increase if EnCana’s exploratory drilling is successful.

“Just the very fact that (EnCana’s acquiring state) permitting for the wells made the area more attractive to competition; that alone increases the potential value,” Akers said.

But Akers said landowners should consider more than just the bonuses and royalties offered in exchange for drilling rights.

“The WhitMar (a company EnCana has purchased leases from) lease form is very friendly to landowners. The lease is 14 pages long and loaded with surface protections, generous well location fees and other benefits to landowners. Other leases can be as short as two pages and include none of these protections. People sometimes get blinded by the money offered on the front end for a lease that is not worth as much to them,” Akers said.

Garry Taroli, an attorney with the Wilkes-Barre law firm Rosenn Jenkins & Greenwald, has been representing landowners in lease negotiations for about three years.

“The leases have become more friendly to property owners. With competition comes more benefits from the property owners’ point of view,” he said.

Many newer leases require minimum setbacks from structures and water sources, extra payments for damaged timber, reimbursements for harm to water or land and testing of water before, during and after drilling activities – paid for by the gas company, Taroli said.

Taroli advised that landowners at least have a lease reviewed by an attorney before signing it.

Some leases he’s seen contain language that could be a headache for landowners. While most leases set specific time limits for drilling, one lease he saw allowed a gas company to drill “for so long as gas could have been produced on the property.”

That term, Taroli said, “could be until doomsday.”

Jeffrey Nepa, an attorney with Nepa & McGraw in Carbondale and Clifford, said he’s happy to see property owners communicating on Internet forums to try to stay informed about lease issues.

“It’s nice to see people pooling their resources together to battle against the gas companies,” Nepa said.

“We live in the age of information. … We see that the gas companies are controlling the information. And a lot of times we see them put out misinformation. But at the end of the day, it comes down to caveat emptor – buyer beware.”

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

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