Gas Leases

There is a land rush going on across Pennsylvania, but buyers aren’t interested in the land itself.

Buyers are interested in what lies beneath the earth’s surface — mineral rights to natural gas deposits.

Record high crude oil and natural gas prices have already pushed up drilling activity in northwestern Pennsylvania and other areas of the state.

But now that already heightened interest is spreading.

The reason is the Marcellus Formation — a hardly tapped formation of deep gas-bearing shale that drilling companies have only recently found a way to exploit.

Development companies, drilling companies and speculators have been crisscrossing the state, trying to lease mineral rights from landowners.

Pennsylvania State University professor and geologist Terry Engelder likens today’s rush to the one that followed when Edwin Drake struck oil near Titusville in 1859.

“In terms of impact on the economy of Pennsylvania, this is comparable only to the initial Drake Well discovery in the 19th century,” Engelder said.

The Marcellus Formation stretches across about 34 million acres of Appalachian Plateau in Pennsylvania, eastern Ohio, western New York and West Virginia, and could hold as much as 516 trillion cubic feet of natural gas.

Horizontal drilling techniques developed in Texas and Oklahoma might conservatively recover about 10 percent of those reserves, and that would ring up at a value of $1 trillion if natural gas prices increase as expected, Engelder said.

Read the rest at GoErie.com