Greene County (PA) | Industrywide Issues | Lease & Royalty Payments | M&A | Pennsylvania | Washington County
WhiteHawk Energy Spends $54M to Grow M-U Mineral & Royalty Assets
WhiteHawk Energy, headquartered in Philadelphia with ownership of mineral and royalty interests for 850,000 gross unit acres and over 2,500 producing horizontal shale wells between the Marcellus and the Haynesville, announced yesterday the acquisition of additional Marcellus Shale natural gas mineral and royalty assets for a total purchase price of $54 million. WhiteHawk owns mineral and royalty rights across nearly half a million M-U acres. The deal does not increase WhiteHawk’s total acreage but does increase the company’s percentage of ownership across that acreage.
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A company called Southern Tier CO2 to Clean Energy Solutions, based in Binghamton, NY (where MDN is located), is sending fliers to landowners in Broome, Tioga, and Chemung counties (along the border with Pennsylvania, where there is no doubt large amounts of Marcellus and Utica gas beneath the ground) inviting landowners to sign up for what appears to be an exciting opportunity to sell gas rights. The flier (below) and company website say the company plans to use carbon dioxide (CO2) to (a) store it underground, but also (b) use it to extract natural gas from underground and then (c) either sell the gas via pipeline or burn it to produce electricity. The technology envisioned is an alternative to fracking. Will it work? And, will it be profitable for landowners?
Once upon a time (roughly 12 years ago), Chesapeake Energy and other shale drillers were leasing property in Columbiana County, OH, in deals that often paid $6,000 per acre for a signing bonus and granted 20% royalties for any oil or gas produced. According to an analysis by the Youngstown Business Journal, those days are long gone. However, many of those original leases have expired, and there is a new push to re-lease in the county, says a Youngstown attorney specializing in oil and gas. Just don’t expect big signing bonuses and royalty rates.
An important decision was recently issued in a federal court case (in Ohio) that has the potential to affect landowners and drillers with shale leases throughout the Marcellus/Utica. At least, we believe it has broader implications. The case is known as Grissoms et al. v. Antero Resources Corporation. The case revolves around the issue of a “market enhancement” royalty clause (MEC), which is common in many shale leases throughout the M-U. An MEC lease typically prohibits the deduction of any post-production costs incurred in transforming raw gas into a marketable product. The question is, when is the gas marketable? At the wellhead or later on, after it has been cleaned up? The judge in the Grissoms case ruled in favor of the landowner and said the gas is NOT “marketable” in its raw form at the wellhead.
Last week, the Pennsylvania Board of Game Commissioners announced it had cut two different deals with Pennsylvania General Energy (PGE). Both deals involve land swaps with the prospect of new shale drilling by PGE on the way in both Lycoming County and Sullivan County. The Game Commission’s remit is “to protect, propagate, manage and preserve the game or wildlife of Pennsylvania.” Money from shale drilling helps the Game Commission accomplish its objectives. Both deals with PGE will provide the Game Commission with a 16% royalty for any natural gas produced.
Two Marshall County, WV landowners with the same last name (obviously related) sued Southwestern Energy (SWN), accusing the company of “well bashing,” in March of this year (see 
Yesterday we told you about a new $2 billion hydrogen project coming to West Virginia (see 
Last week MDN told you that WhiteHawk Energy, headquartered in Philadelphia with ownership of mineral and royalty interests for 850,000 gross unit acres and over 2,500 producing horizontal shale wells between the Marcellus and the Haynesville, had proposed marriage to PHX Minerals, based in Fort Worth, Texas, owner of 75,000 leased mineral acres principally located in the SCOOP and Haynesville plays (see 
At the end of May, WhiteHawk Energy, headquartered in Philadelphia with ownership of mineral and royalty interests for 850,000 gross unit acres and over 2,500 producing horizontal shale wells between the Marcellus and the Haynesville, sent a letter to the board and management of PHX Minerals, based in Fort Worth, Texas, owner of 75,000 leased mineral acres principally located in the SCOOP and Haynesville plays. The letter proposes marriage–a combination of the two companies. WhiteHawk received no response and tried again about three weeks later. Still nothing. So WhiteHawk has gone public to catch the attention of PHX shareholders, hoping to convince them to pressure PHX’s board–the M&A equivalent of a shotgun wedding.
We spotted an in-depth article by RBN Energy about mineral rights, royalties, and working interests. Private investors and companies have sprung up to buy such rights. RBN says competition to buy these rights has heated up in recent years. The article gives us a better understanding of the scope, size, and inner workings of the royalty and rights marketplace.
For years we’ve railed against what we consider the theft of royalties and bonus payments by the state of Pennsylvania from landowners with creeks and rivers running through their leased (for shale drilling) property. The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) claims that under a centuries-old law, the state of PA “owns” the property under “navigable” waterways–including rivers and streams (see 
In 2021, U.S. District Judge Lee H. Rosenthal, Chief Judge for the Southern District of Texas, approved deals for Chesapeake Energy to pay $6.25 million to class members of the three royalty lawsuits brought by Pennsylvania landowners (roughly 15,000 class members) and another $2.9 million to the lawyers involved (see 
Yeah, you read the headline correctly. Encino Energy offered the State of Ohio $1.8 BILLION (estimated) to drill for natural gas and oil under Salt Fork State Park, located in Guernsey County, OH. The park includes 17,229 acres of land and 2,952 acres of water. In December, Encino made an offer to the state immediately after House Bill (HB) 507 passed. The offer includes a payment of $5,500 per acre as a signing bonus and 20% royalties. No drilling would be done inside the park. All drilling would be done on land surrounding (on the outside of) the park.