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Old 02-26-2009, 02:51 PM
 
Location: Elkins, WV
371 posts, read 688,467 times
Reputation: 372
Default Natural Gas- What's the Deal?

I have seen several properties in NW Pennsylvania that list natural gas well on property- free gas plus quarterly dividends. What's the deal with that? Are there hidden stipulations? Is there a catch, or a major downside to this? What would the fine print say? Any info is appreciated! Thanks.
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Old 02-26-2009, 03:01 PM
 
3,127 posts, read 5,256,645 times
Reputation: 1976
Much of PA is underlain by the Marcellus Shale and gas can now be profitably extracted from this rock formation due to new technology. There are also older gas wells, typically in the Oriskany rock formation.

Either way, there will definitely be fine print. The point of the fine print is basically that the gas companies can do this:
YouTube - Fracing a Natural Gas Well whenever and almost wherever they want. If the piece of property is large enough, perhaps you can deal with things like this. Definitely something to be aware of.
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Old 02-26-2009, 08:21 PM
 
Location: South Central PA
1,561 posts, read 2,819,807 times
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Quote:
Originally Posted by ki0eh View Post
Much of PA is underlain by the Marcellus Shale and gas can now be profitably extracted from this rock formation due to new technology. There are also older gas wells, typically in the Oriskany rock formation.

Either way, there will definitely be fine print. The point of the fine print is basically that the gas companies can do this:
YouTube - Fracing a Natural Gas Well whenever and almost wherever they want. If the piece of property is large enough, perhaps you can deal with things like this. Definitely something to be aware of.
Yep.

You get money but essentially lose control of your land for the given period. Though a friend's grandmother got a hefty amount of money for access to drilling, so it's worth it financially speaking. But... not everything in life is about finances.
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Old 02-26-2009, 09:59 PM
 
9,694 posts, read 11,824,392 times
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And a lot of the gas companies that moved in and offered gas leases to landowners didn't pay out the big bucks. I took the whole thing with a grain of sand and cautioned people to beware, but a lot of idiots and dummies went out and bought new cars and boats and RV's before they got their lease check and hysterically they are really hurting right now! There are a lot of dumb people that will buy into anything.

Just know what you are getting into and accept the big money that may be on offer might never come true. I do know people that have got money from it and do continue to get checks, but just don't count on it or believe everything the gas companies say.

Actually the race for the Marcellus shale gas and it's proposed income spiked land values, at least up where I live. Now that reality has set in and people aren't getting paid, I'd like to see those values come down.
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Old 02-27-2009, 12:07 AM
 
Location: Pittsburgh, USA
3,134 posts, read 5,581,969 times
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I remember a small farm for sale near Pittsburgh. It had two gas wells on the property. The owners got free gas and what today might be $25-30 a month rent for each well.
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Old 02-27-2009, 06:00 AM
 
3,127 posts, read 5,256,645 times
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Quote:
Originally Posted by wanneroo View Post
Actually the race for the Marcellus shale gas and it's proposed income spiked land values, at least up where I live. Now that reality has set in and people aren't getting paid, I'd like to see those values come down.
Amen to that! I see a piece of ground in Tioga County that transferred for $150k about five years ago, now on offer for $340k WITHOUT GAS RIGHTS! Now, come ON guys!!
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Old 02-27-2009, 08:04 AM
 
9,694 posts, read 11,824,392 times
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Quote:
Originally Posted by ki0eh View Post
Amen to that! I see a piece of ground in Tioga County that transferred for $150k about five years ago, now on offer for $340k WITHOUT GAS RIGHTS! Now, come ON guys!!
Yes I noticed a lot of that going on. "i'll sell you a piece of land at an inflated cost, but I'll keep the gas rights". Someone is smoking crack.

I don't know if you've noticed though but there was a rush to grab land last summer but the market is dead now. The gas companies stopped paying on all the leases everyone rushed to sign last summer and now has IOU's out everywhere and honestly I doubt people will ever see their money.

It was what I predicted and I was dismissed as a heretic, but here we are. It was too good to be true. I think a lot of people signed leases that gave them $2500 an acre, some higher, some lower and if you owned 100 acres or whatever that was a nice little sum.
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