Monday, January 30th, 2023
Monday, January 30th, 2023

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State to lease 74,000 acres for gas drilling

Harrisburg – One of Appalachia’s largest landowners,
Pennsylvania’s state forestry agency, wants in on any windfall from
drilling a potentially lucrative natural gas formation.

More than 74,000 acres, or more than 115 square miles, in three
northcentral Pennsylvania state forests went up for bid recently to
natural gas companies that are in hot pursuit of the mostly
untapped Marcellus Shale gas formation.

The state Department of Conservation and Natural Resources
posted legal notices in mid-July announcing the lease sale. The
department had said earlier this year that it would allow new
drilling to resume following a five-year moratorium, a decision
that pleased exploration companies and angered environmental
groups.

“It’s an opportunity to deal with one large landowner, rather
than piecemeal, and that makes it attractive,” said department
spokeswoman Chris Novak.

Propelled by high natural gas prices, companies from Texas to
Canada are scouring for drilling opportunities on private land that
sits atop the Marcellus Shale formation, a deep gas reservoir
located some 6,000 to 8,000 feet underground.

In some cases, company “landmen” have drawn accusations of using
aggressive tactics to get property owners to sign lowball
leases.

The formation is thought to contain large quantities of natural
gas, with the best prospects in upstate New York, eastern Ohio and
across much of Pennsylvania and West Virginia. For decades,
geologists and exploration companies have known about the gas
trapped in the Marcellus Shale, but only recently developed a way
to extract it.

More than 300 companies have expressed interest to the
department in drilling on Pennsylvania’s state forests, although
state officials refused to release the list.

All told, the department owns about 2.1 million acres of state
forest.

Bids for the below-ground oil and gas rights on 18 tracts will
be accepted until 2 p.m. on Sept. 3. To win, a bidder must submit
the highest offer on the first year’s land rental.

The 10-year lease also includes standard annual rental fees –
$20 an acre in years two through four and $35 an acre in years five
through 10 – and a standard 16 percent royalty collected by the
state on natural gas production.

For each tract, state forestry officials will limit the number
of well pads that are allowed, encourage the use of existing roads
and prohibit surface work that could damage sensitive areas,
waterways or recreational areas.

The tracts are in the Loyalsock, Tiadaghton and Tioga state
forests in Tioga and Lycoming counties.

Pennsylvania state officials imposed a moratorium on drilling in
state forests in 2003 in response to concerns that roads, well pads
and pipelines were destroying wildlife habitat.

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