NARO Says Marcellus Land Grab in PA is Over for Landowners

In a wide-ranging article talking about the natural gas industry in Pennsylvania, and how it is maturing, we get this bit about landowners’ prospects in signing new lease deals from a National Association of Royalty Owners (NARO) rep:

The past few years saw what seemed at times to be a mad rush by the industry to persuade property owners to sign deals. But now many of the big drilling companies have tens of thousands of acres under lease, said Brian Pitell, a representative for the National Association of Royalty Owners in northwestern Pennsylvania.

"The land grab, like the gold rush, is kind of over. You don’t have two, three or four different companies" all competing to offer leases in the same region, he said.

That means landowners have fewer options, and less power to demand certain lease terms.

"There’s a muting, to some degree, of competition," Mr. Pitell said. Sometimes it’s the fine print that changes, he said, noting that one recent lease from a big company removed the landowner’s right to audit royalty statement payments.

And if a landowner doesn’t like that?

"If you think you’re just going to hold out, that may not work out all that well for you," Mr. Pitell said.

That’s because when many surrounding landowners have already signed leases with one company, others will have little use for the remaining isolated parcels.*

*The Scranton Times Tribune (Dec 19, 2011) – Pennsylvania gas industry maturing