Marcellus Drilling in ACORD Municipal Park (Allegheny County, PA) Voted Down by Local Councils
The Avonworth Municipal Authority in Allegheny County, PA recently signed a five-year drilling lease for the ACORD Municipal Park property controlled by the Authority (see the MDN story here). However, the deal was contingent on four of the five municipalities that oversee the 119-acre park in Kilbuck and Ohio Townships. Last night Emsworth council was the second municipality to vote against the measure and so the deal will not go forward.
Good question, and one that Brandon Otis, a CPA and valuations specialist with Alpern Rosenthal, an accounting advisory firm, addressed at a recent meeting in Pittsburgh. Otis has done research on 384 Marcellus wells in Susquehanna County, PA and has come up with a list of criteria for determining value. Among the criteria he uses:
Many landowners in the Broome County, NY area who signed gas leases years ago are now receiving letters from the energy companies holding those leases that the landowner is “locked in” to the terms of the lease even though the original term has now expired. Why? The legal term is “force majeure,” which roughly means “due to circumstances beyond our control—the fact that New York State continues to prevent drilling—you have to stick with us for a while longer.” Because this involves contracts and interpretation of the terms of those contracts, it’s now in the hands of lawyers, or heading in that direction.