Some Landowners in Tioga, PA Area Receive Six-Figure Royalty Checks – Each Month

gas money flameAn article discussing the potential impacts of shale gas drilling in the area around Erie, PA does a good job in exploring the benefits of shale gas drilling that have already occurred in Tioga County, PA. Tioga County is one of the most densely populated drilling regions in the entire Marcellus Shale play. A few facts from the article:

Almost all corners of Tioga County have been leased, with most of the land, approximately 290,000 acres, now controlled by Royal Dutch Shell.

In 2010 alone, 564 drilling permits were issued and the drilling of the 261 wells started in Tioga County, according to the state Department of Environmental Protection.

By the time the drilling is over, there could be a 3-acre well pad every square mile, each hosting six wells, said Earle Robbins, a former Penn State Cooperative Extension agent who is a consultant to landowners in Tioga and other counties.*

Landowners Jackie and Clifford Root receive monthly royalties from the production of two wells on their land. Their smaller producing well generates around 400,000 cubic feet of gas per day, bringing them $2,000-$3,000 per month. The other well? Around 4 million cubic feet of gas per day, giving them around $11,000 per month in royalties. And Jackie Root says, “I know people collecting six figures per month” in royalties. That’s over $100K per month!

What’s the potential in the Marcellus? Possibly 18 times bigger than the already huge Barnett Shale play in Texas:

The geologists whose predictions helped fuel the boom are Terry Engelder, of Pennsylvania State University, and Gary Lash, of the State University of New York at Fredonia. They calculated in 2008 that the formation contains 500 trillion cubic feet of natural gas — more than 18 times the content of Texas’ Barnett shale, the formation currently leading the nation in natural gas production. The geologists have since doubled their estimate of Marcellus shale gas, to 1,000 trillion cubic feet.

As the news about Marcellus sank in, bids for leases in Tioga County went up, to $1,500, $2,500, $5,000 per acre. Jackie Root knows of one lease signed for $6,500 an acre and royalties of 20 percent.*

Jackie Root’s advice to landowners who have  not yet leased their land?

  • Don’t take the first offer.
  • Get a lawyer to review the deal.
  • Band together with your neighbors in a coalition.

The article also tries to strike “balance” by presenting the viewpoint of one Tioga, PA resident opposed to drilling, along with a reference to the recent drilling accident in Tioga State Forest where fracking fluids were spilled on top of the ground (which happened on Jan. 17). All in all, a well researched and well written article, worth your time.

*Erie Times-News (Jan 30) – Times In-Depth: What can Erie expect from the Marcellus shale boom?