EXCO Resources has withdrawn an offer made to the borough of Ford City, PA to lease borough-owned land for Marcellus Shale drilling:
[Ford City] Council said Monday that EXCO Resources withdrew its offer to lease about 300 acres of borough-owned property to extract natural gas.
EXCO had proposed a lease that would have paid the borough nearly $1 million up front for the drilling rights to three borough-owned parcels, and in addition a share of 18 percent royalties generated per a 640-acre unit if and when wells begin production. In the borough’s case, that would have amounted to about 9 percent (300 acres of the 640-acre unit).
The lease would have paid $127,775 for the 40-acre brownfield parcel near the Ford City Bridge, $543,171 for the 180-acre Ford City-owned ballfield property across the Allegheny River and within North Buffalo and $189,783 for the 65-acre landfill site.*
There was no official explanation why EXCO withdrew the offer, but one area resident speaking at the meeting, Renee Zacour, claimed that PPG actually owns the mineral rights beneath borough-owned land and that the borough cannot sell rights it does not possess.
*Leader Times (Mar 15, 2011) – Marcellus shale lease offer for Ford City land pulled