Gas Leases

A consulting firm has informed Northeast Pennsylvania landowners Chesapeake Appalachia has revoked and rescinded offers for natural gas leases.

Based in Olean, N.Y., the Long Consulting Group LLC states in a September letter “Chesapeake is refocusing its oil and gas efforts and is scaling back its leasing efforts.”

The company said the “re-focusing is due to regulatory issues and current economic conditions.” Long Consulting Group project manager Myrna Coleman would not comment and referred questions to Chesapeake.

Efforts to reach Chesapeake spokesman Matt Sheppard were unsuccessful Tuesday.

The letter was sent to individual landowners in Wayne, Wyoming, Sullivan and Susquehanna counties, Marian Schweighofer, of the Northern Wayne Property Owners’ Alliance, said.

She added the letter was sent to people who were in negotiations with land men.

According to natural gas industry representatives, Chesapeake and other companies have been challenged by a drop in natural gas prices and state regulations.

Natural gas companies are also limited by how much money they have available for leases and drilling, said Chip Lines-Burgess, of Homeland Energy Ventures in Wilkes-Barre.

She added some companies go into an area and sign as many leases as they can and set aside money for drilling.

Homeland Energy Ventures has been working with Chris Robinson, of Pittsburgh-based Raegayle, to negotiate with natural gas companies on behalf of the Wyoming County Landowners Group.

Along with financial constraints and faltering economic conditions, companies have been “under a barrage of new permit regulations from week to week,” Pennsylvania Oil & Gas Association President Stephen Rhoads said.

He added it has been difficult for the industry to work with the state Department of Environmental Protection.

Effective Aug. 23, companies that want to develop wells in the Marcellus Shale are required to submit a Permit Application Addendum to DEP, as well as a permit application for gas well development.

“We’ve made some changes (to regulations) in the last several months,” DEP spokesman Mark Carmon said. “We’ve made a pledge to get the reviews done quickly.”

He added DEP is attempting to do a ‘balancing act’ between protecting the environment and the potential economic benefits of natural gas drilling.

“The area (of the Marcellus Shale well development) is very rural and a lot of people depend on their wells for drinking water and for their livestock,” Mr. Carmon said.

[Via the Times Tribune]