Natural gas that is trapped underground has little or no value to landowners. It becomes a valuable resource only when companies with the proper equipment and technical ability begin to extract it from deep underground. Consequently, the owner of the land from which the gas came is compensated for its value through the payment of a royalty. Part of the process of determining value and compensating the landowner for the gas is the leasing of gas rights on private land, which allows the company to explore for and start extracting the gas.
Landowners considering leasing their land must understand that a lease is a legal document, with very clear rights and obligations. It is essential that landowners considering leasing talk with an attorney before signing anything, and that they talk with more than one company so they can compare prices and conditions before making a decision.
Financial concerns are often of greatest interest to landowners, but they should be equally interested in the other components of the lease, such as the length of the lease, whether it "holds" the entire property, whether the company is granted access to the surface of their property, whether the landowner has a say on where a well is sited or where access roads are built on their property, and other issues which may affect their quality of life and other uses of their land.
Webinar: 11-19-09. Nathan S Bennett, Sr. Geologic Scientist, DCNR, Bureau of Forestry, Minerals Section
Ross Pifer, Penn State Dickinson School of Law
Les Greevy powerpoint 2008
Review of Oil and Gas production/management in Pennsylvania. PA Dept. of Environmental Protection. by Ron Gilius (2.4 MB)