Susquehanna County Blog

It occurred to this writer after reading a comment from a contributor to this blog that the actual numbers of both the investment and the obvious internal projections of profit from this “Play” are nothing short of enormous.   Using Susquehanna County as the example, follow this: We have about 823 square miles of land here.  There are 640 acres in a square mile.  This means there are roughly 526,720 acres of land here.  If, at the end of the day, assuming a good class action doesn’t negate these leases (due to illegality of contracts, blockbusting techniques, etc.); at the current rate, these gas companies will probably have about $1,000 per acre invested. 

Of course, there areas which can’t or won’t be leased, such as under boroughs and villages, but that is a relatively small area.  Even some of those communities are considering leasing their excess land.  So, for the sake of discussion, let’s assume that the total investment to lease gas (and oil) (and in more than a few cases - mineral) rights here in Susquehanna County is in the neighborhood of $562,720,000.  That is NOTHING to these companies which expect to make many multiples of their investment.  If you haven’t read it here or seen it elsewhere, you should know that very recently, leases were signed in the Arlington, Texas area for $22,000 per acre, plus 25%. 

Reading elsewhere, it will cost in the neighborhood of $1 to 3 million to drill a well.  Before you start feeling bad, remember, they won’t have that investment until they actually drill and connect the well to the to be installed piping through a lot of backyards.  Once that is is place, just remember, they keep as much as 87.5% of the value of the gas flowing from that well.  So, the ultimate value of the wells to be drilled in Our Fair County to these companies could easily be in the tens of billions of dollars. 

If you have a problem with the last statement, consider this: it has been conservatively estimated that the Marcellus Shale contains one quarter of the known reserves in the contintental US.  These companies would not be as interested in this area as they are if they didn’t stand to make a whole lot of money.

The more information that comes to the surface, the more this writer is convinced that the leases signed should and must be challenged.  Not for the amount of “bonus money” or percentage of royalty unless it doesn’t meet the Commonwealth’s minimum requirements, rather for the way the “landmen” used improper and probably illegal tactics (read BLOCKBUSTING TACTICTS) to get (uneducated as to their rights).  Again, based on the previously posted links, the “landmen” who negotiated and executed these contracts are almost certainly operating well outside the law. In other states, this may not be the case, but reading the statute, it is abundantly clear that they are here.  The easy answer is to REFUSE to negotiate with them. 

Believe me, these companies want the access to this huge pool of gas (and the oil) which lies below.  It’s time to fix the problem before it becomes unfixable.  Oh yes, it has been stated by several who apparently know, the “Great Saviour”, our minority commissioner is asking a ridiculous fee to represent these injured landowners in a class action.  Don’t make a SECOND mistake.  Tell him to do his job as a commissioner.  After all, we are paying him (and two other commissioners) to represent ALL of us.

=================================

Responsible comments are always welcome, whether it is this story or another. If you haven’t registered yet, go to the Meta Section (on the right side of the page) and register. It’s free, fast and important for you to be able to post responses to items on this site. Nobody wants your name however, please note, personal attacks, spamming and the like will not be tolerated. Welcome to SusqcoBlog.com! Happy posting.

This entry was posted on Friday, April 11th, 2008 at 7:19 am and is filed under 2008, 2008 Susq. Co. Commissioners, Gas Wells. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.