The South Butler County School District (Butler County, PA) school board, after a year and a half of meetings and research, has voted to lease school district land for Marcellus Shale gas drilling. The lease is with Phillips Resources, recently bought by and now part of Exxon Mobil, and includes some interesting provisions, including an extra fee per well drilled, and an allowance for pooling, but not forced pooling.
ProPublica recently compiled a list of the top 10 natural gas drillers in the U.S. based on daily natural gas production volume. The list includes gas drilled by both “traditional” vertical drilling as well as “non-traditional” horizontal hydraulic fracturing. Or think of it as non-shale gas and shale gas—companies who drill for both are in the list. The Marcellus Shale represents a good portion of the gas now being produced in the country, but other shale formations, like the more mature Barnett Shale (in Texas) also contribute a substantial volume of natural gas.
MDN presents this list as a useful resource for landowners. The biggest drillers are not always the best, and not always the right choice for a given landowner and situation. However, knowing who the “bigs” are can be a helpful guide—you know they have the money and the technology to get the gas out of the ground, and they have money to pay for leases and royalties.
A group of landowners with 20,000 acres in Jefferson County and Harrison County, in eastern Ohio, is nearing a lease deal to allow Marcellus Shale drilling. One of the energy companies in the final bidding is XTO Energy (now a division of Exxon Mobil).
In 2008, the Deposit (NY) Landowner Coalition, with some 500 members, signed the first large scale leasing deal in New York’s Southern Tier region. The least was signed with XTO Energy which has subsequently been bought by ExxonMobil. The deal gave landowners $2,411 up front for leasing, and a 15 percent royalty when drilling begins. The lease payments made headlines around the country in a deal worth $110 million. The original lease was for five years.
ExxonMobil has just picked up another 317,000 acres of gas leases in the Marcellus Shale by purchasing two privately held Pennsylvania drilling companies for $1.69 billion. Since last year, ExxonMobil has become the largest producer of natural gas in the U.S.
Two of the worlds largest energy companies have made major investments in shale gas. Exxon Mobil made a $35 billion investment when it bought XTO in 2010. Exxon’s goal is to double U.S. natural gas output in the next ten years. Chevron has concentrated its investment specifically in the Marcellus Shale with the $3 billion purchase of Atlas Energy and a large acreage deal with Chief Oil & Gas. Chevron expects to increase its output of gas seven-fold in the next few years.
But investors in each of these energy giants want “more disclosure” on the so-called environmental risks involved with horizontal hydraulic fracturing, as witnessed at their annual meetings yesterday:
In an interesting (some would say hypocritical) twist on New York State’s moratorium against drilling in the Marcellus Shale because of environmental concerns, it seems the state’s comptroller has no problem investing some of the state’s huge $140 billion pension fund in shale gas drilling operations, to the tune of $1 billion:
A group of investment managers who belong to an organization called The Investor Environmental Health Network have banded together (some might call it collusion) to put pressure on energy companies who engage in natural gas drilling by using hydraulic fracturing. Their aim? To stop fracking of course, but that’s not what they say in their press statement. They’re just little ‘ole investors encouraging companies to “do the right thing” …
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From a Reuters news story on the Financial 24 website:
Exxon Mobil Corp, the world’s largest publicly traded company, has leases on 19,400 acres in the Marcellus Shale, a formation that is said to hold vast amounts of natural gas.
In September, Exxon bid $85.2 million for 18 blocks in the Marcellus, a large shale formation that runs through parts of New York, Pennsylvania, Ohio and West Virginia.
Exxon, based in Irving, Texas, was the high bidder on six Marcellus blocks, paying a total of $22.4 million for acreage in Tioga and Lycoming counties in Pennsylvania, company spokesman Patrick McGinn, said.
Read the full article: Exxon has 19,400 acres in the Marcellus shale