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What is the Marcellus Shale?
The Marcellus Shale is a sedimentary rock formation deposited
over 350 million years ago in a shallow inland sea located in the eastern United
States where the present-day Appalachian Mountains now stand (de Witt and
others, 1993). This shale contains significant quantities of natural gas. New
developments in drilling technology, along with higher wellhead prices, have
made the Marcellus Shale an important natural gas resource.
The Marcellus Shale extends from southern New York across Pennsylvania, and
into western Maryland, West Virginia, and eastern Ohio. The production of
commercial quantities of gas from this shale requires large volumes of water to
drill and hydraulically fracture the rock. This water must be recovered from the
well and disposed of before the gas can flow. Concerns about the availability of
water supplies needed for gas production, and questions about wastewater
disposal have been raised by water-resource agencies and citizens throughout the
Marcellus Shale gas development region. This Fact Sheet explains the basics of
Marcellus Shale gas production, with the intent of helping the reader better
understand the framework of the water-resource questions and concerns.
Above passage taken from, Water resources and natural gas production from
the Marcellus Shale: U.S. Geological Survey Fact Sheet 2009–3032
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If I join a coalition, does it commit me to signing their
lease?
No, joining a coalition does not commit you
to signing their lease. However, at some point prior to the lease bidding
process, the steering committee will need to get an idea of who has intentions
of signing the lease when the time comes. This is so that when your groups lease
is sent out to bid, a fairly accurate number of acres can be given to the
interested energy companies. It would not be fair practice to tell an energy
company that they are bidding on 10,000 acres and then only have landowners
actually sign 4,000. In most cases, the steering committee will not ask for your
intentions until you have had an opportunity to review the proposed lease.
What is a Landman?
A landman is an agent who works for a drilling company, or is
contracted by a drilling company or broker. Their mission is to negotiate the
lowest possible lease price and most advantageous terms for the oil/gas drilling
company. During a "play" hundreds of landmen may converge on an area to quickly
close leases before landowners realize the value of their mineral assets. When
the landman comes, it is time to seek qualified legal oil/gas assistance. You
may be signing a deal that is more valuable than the value of your property
itself!
What is a pool or unit?
It is a term in gas and oil production and New York State
Department of Environmental Conservation. A pool or unit is the area from which
and actual well would draw its gas or oil. Think of it as an under ground pond.
If 1/2 the pond of gas is below you and the other 1/2 is below your neighbor
then, when a well is bored you and your neighbor would comprise the pool, or
"production unit". You and your neighbor share the royalty money from the gas
well 50/50.
What is a sign on bonus?
A sign on bonus is a one time per acre fee
that you would get for signing a gas lease with an energy company.
For example, if you have 100 acres and you
sign for $750.00 per acre then you will get a check for $75,000.00 dollars. It
usually takes between 30-90 days after signing to receive your money.
What is a royalty?
If you are in a unit of a well that produces gas you will get
monthly royalty payments based on a percentage of the wells production. The
minimum you can be paid in New York State is 12.5%. However, you will share the
percentage with other landowners within the unit.
For example, if you are in a unit that is 40
acres, and you have 10 of the acres in that unit then you would receive 25% of
the 12.5% royalties.
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