The Marcellus Shale measures more than 95,000 square miles and the competition for natural gas in the shale is a competition for land. This brings up the question, “Can marcellus shale positively affect you as a landowner?”
Many landowners are confused by the process and others worry that they may not be getting the full value and rights to their land. Also, elected officials see reasons to consider setting up new rules to protect landowners.
Signing leases granting a gas company rights to the gas under the land can profit the landowners in two ways:
1.) When originally signing the lease, landowners receive an upfront payment of rent for the term of the lease. The payment is stated per acre and can widely vary based on location.
2.) A continual flow of money is promised based on how much gas a well produces – stated as a royalty of a certain percentage of the value of gas. Representatives of the companies interviewed stated that royalties these days average around 15 percent.
The money will not come all at once – nor will it come in a steady stream. A well’s output begins with a rush within the first two years. How much the companies offer depends largely on how much they expect to get for the gas they find. Plus, signing a lease does not guarantee that a company will drill. They can segregate that portion of the land, never pump it, and keep it as an asset.
With the multitude of companies in the Marcellus, there is no fixed order for doing things, but the remainder of the process will include, at minimum, a title search, the signing of the lease and the issuing of the bonus payment to the landowner.