You have probably heard the words “Marcellus ShaleA fine grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock.ShaleA fine grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock. is one of the most highly productive types of sedimentary rock whose density provides tight stores forhydrocarbon reserves below. Marcellus ShaleA fine grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock. is a rock formationA body of earth material with distinctive and characteristic properties. running through about two-thirds of Pennsylvania, and areas of New York and West Virginia. Geologists estimate that there is a large enough natural gas reserve within the shaleA fine grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock. to power the United States for one to eight years.,” “gas lease,” or “natural gasA naturally occurring mixture of hydrocarbon and non-hydrocarbon gases beneath the earth’s surface – often in association with petroleum. exploration if you are a property owner in northern or southwestern Pennsylvania.  Maybe you have heard your neighbors talking about “leasing” their land – or maybe a gas company representative has visited your home asking you to sign a lease.  A lease grants permission to explore or drill natural gasA naturally occurring mixture of hydrocarbon and non-hydrocarbon gases beneath the earth’s surface – often in association with petroleum. on your land.  This article was meant to guide landowners and tell them exactly what they need to know about drilling and answers some of the common questions/concerns that exist.  When you fully understand this process, you can make better decisions for your land, your family, and the economy.

Natural gasA naturally occurring mixture of hydrocarbon and non-hydrocarbon gases beneath the earth’s surface – often in association with petroleum. has been extracted from underground sources in PA since the early 1800’s.  But with new technologies in place, gas extraction from reserves is becoming more economically feasible.

Landowners are being compensated for the use of their land.  Natural gasA naturally occurring mixture of hydrocarbon and non-hydrocarbon gases beneath the earth’s surface – often in association with petroleum. extraction is a benefit to the area.  It can also bring many new jobs to the area.  As you can see, it seems that drilling is beneficial to all parties involved.

As a private landowner, the gas development activity may seem confusing because much of the information is carefully guarded to prevent competing businesses from interfering with each other’s gas development plans.  The sudden interest and pace of drilling has led to suspicion and uncertainty about the gas exploration process.  As a property owner, you should understand the following points about natural gasA naturally occurring mixture of hydrocarbon and non-hydrocarbon gases beneath the earth’s surface – often in association with petroleum. leasing.

• Property owners generally have the right to explore and extract natural gasA naturally occurring mixture of hydrocarbon and non-hydrocarbon gases beneath the earth’s surface – often in association with petroleum. underneath their property unless this right has been sold, leased, or transferred to another party.  If you own the rights, you may lease the right to explore to your land to a gas company.  The property owner will then be given payment for the lease and royaltiesThe amount exploration and production companies pay to the mineral rights owners of a producing well. Pennsylvania state law requires this rate be no less than 12% of the market price per 1000 cubic feet of gas on the day that gas comes out of the ground for the value of the gas.  “Mineral rightsLegal rights that allow for search and removal of minerals on a particular parcel of land.” and “natural gasA naturally occurring mixture of hydrocarbon and non-hydrocarbon gases beneath the earth’s surface – often in association with petroleum. rights” are not the same thing.  If any questions, you can check the deed to your property information.
• Gas leases are legal and binding documents – ie – contracts.  They represent an official agreement between the gas company and landowner.  Because the leases are contracts, it is recommended to have them reviewed by a lawyer who is knowledgeable in this area.  Once you sign a lease, there is no way to get out until the lease has expired.
• Gas leases are partially negotiable.  Gas companies may offer a preprinted lease document.  This document can serve as a starting point for a two way negotiation – or it can be accepted or rejected by the landowner.