at the Citizen Power Alliance 2010 Wind Conference
Marcellus shale, climate change, money, politics and the environment
|After a flurry of leasing activity last summer provoked a frenzy of excitement among many landowners, things went very quiet later in the fall. One land agent working in Westfield remarked that many of the exploration companies had already leased the land they wanted, at least for the time being, and were just tying up loose ends, negotiating leases for property they needed for access, pipelines and such. That was, for the most part, the way things remained until now. R & R Energy Consulting in Lawrenceville (an energy consulting firm begun by Jackie Root and Earle Robbins, former Tioga County Penn State Cooperative Extension agent) explains this situation on its website. “An extremely weak economy, rising unemployment, a severe lack of credit and an abundance of fear and uncertainty created a crisis in the global economy in 2008, including the natural gas/oil industry. We saw leasing rates and royalties go from record highs to a standstill. The U.S. natural gas wellhead price (dollars per thousand cubic feet) dropped from $14 in June 2008 to just under $3 in late August 2009. Many companies saw their company stock prices drop by 50 percent or more. The S & P Index was off 37 percent, its worst result since 1937.”|
The quietness may be coming to an end.
Experts at Penn State’s College of Agricultural Sciences reported this week that a fierce bidding war has doubled the prices being offered for leases in Pennsylvania. “Energy companies seem to be returning to the state and buying up drilling leases with a vengeance,” said Joann Kowalski, Penn State Extension economic development educator in Susquehanna County. “The proven performance of existing wells may have companies competing to lock up prime properties in the state’s Northern Tier.
“Word hit the street in September that Fortuna Energy was going to be paying the Friendsville Group $5,500 an acre for a five-year lease, with 20 percent royalties for producing wells,” Kowalski continued. “That was probably about twice the rate that had been offered up to that point.” She noted that Fortuna had not been buying leases in Susquehanna County before this – they were doing most of their work in Bradford County.
posted by CITIZEN POWER ALLIANCE at 7:57 AM - permanent link
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