A new land rush is on in West Virginia and nearby states, though this time it’s not for gold or oil, but rather for natural gas reserves contained in shale several thousand feet beneath the state.
New drilling permits have tripled in recent years, and in recent months, “landmen” – or energy company representatives – have been contacting landowners across West Virginia, trying to negotiate leases for their mineral rights.
To help make sure landowners get a good deal, and understand what they’re signing, the Farm Bureau and West Virginia Surface Owners' Rights Organization are joining together for a series of educational meetings. On Friday night, 135 people showed up for a meeting in Elkins.
The room at the American Legion was full of people who had been turned away from an overcrowded meeting three weeks before, when 400 people showed up.
The untapped natural gas reserves are three to six thousand feet under the earth, in a rock formation called Marcellus Shale, which runs from NY southwest through PA and WV. Geologists have known about it for years, but new drilling technology and rising natural gas prices mean that energy companies are starting to drill for the perhaps 50 trillion cubic feet of recoverable natural gas down there.
David McMahon, a public interest lawyer, and part of the WV Surface Owners’ Rights Organization, says it’s generating excitement in new places.
“The Marcellus Shale is not just found in the traditional oil and gas fields, but they are found over here in the East,” he said. “We’re in Randolph County now – all up and down from Monroe County up through Preston County there’s a huge land rush of landmen.
“In the Upshur County Courthouse I’m told they put folding tables out in the hallways for all the landmen because there wasn’t enough room in the record room for them,” he said.
Republican State Sen. Clark Barnes organized Friday’s meeting.
“For generations we’ve been exporting the wealth of West Virginia, and right now we have an opportunity for the people that own their land and own their mineral rights to keep some of that wealth at home,” he said.
Barnes noticed several months ago that local courthouses were full of people researching deeds. He discovered that they were turning this information over to landmen. He also became concerned at some of the offers for leases and some of tactics that were being used.
For example, some landmen have been showing up at people’s doors and offering them $5 per acre per year up front money, which Barnes says is what landowners were offered a hundred years ago.
He said landowners in PA were getting $1600-$1800 an acre. Some landowners in WV have negotiated up to $2500 per acre per year up-front money.
Jim Bazzle, a landowner who lives in Beverly, said he wants any exploration on his property not to disturb the environment.
“I own property that is in environmentally sensitive areas, where two native trout streams join and travel through it,” he said. “It joins a national forest. It’s beautiful, woodland, typical West Virginia highlands property, and I’m very concerned that it be maintained.”
Vilas Stalnaker, 84, of Elkins has already signed a lease with a Texas-based oil and gas company. Before signing the lease, he did consult two attorneys, but he’s a bit nervous because the first check hasn’t arrived.
“It’s six days overdue right now, so I just wondered what recourse I had, you know, if they don’t send the money. They’re supposed to send the entire amount, you know,” he said.
He said he was offered $300 an acre, and is happy with that deal.
The message from Friday’s meeting – over and over again – was “slow down, and learn.” David McMahon couldn’t emphasize it enough.
“The most important thing is – understand what you are signing. There is no such thing in law as a standard lease. The standard lease they present you is what their lawyer drafted up for them. Go to our Website. Pay a couple hundred dollars for a lawyer to explain it to you. Think of it as insurance like you pay for car insurance on your car. This is insurance on your land use,” he said.
“I’ve seen people who’ve signed $5/acre and 1/8 royalty for a Marcellus Shale well with no surface owner protections – with leases that provide for pipelines across their lands to serve other lands that even after the wells on their land have dried up, all those kinds of things people need to consider.
“Take your time. The landmen are rushing you. There is a reason they’re rushing you. They don’t want you to get educated. There is no real rush. If they say, ‘Well, if you don’t lease, we’re going to go to your neighbors, and we’re going to get them to lease,’ say, ‘No thank you’ and when they walk out the door you put your hat on and you go talk to the neighbors and you guys negotiate together and get a better deal for both of you.”
After presentations by McMahon and well operator, Alvin Engelke, questions from landowners went on for hours. And it looks like they will continue for months to come.
For more information regarding landowners rights, visit the WV Surface Owners Rights Organization's Web site.