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How Do I Lease My Land?

Posted: January 16, 2011

Penn State Extension provides a page on the Natural Gas website -- "Got Marcellus Questions?" -- for people to ask questions directly of educators and faculty involved in Marcellus Shale Education. The most frequently asked questions relate to the leasing process -- current lease rates, the leasing process, how to get information about leases nearby, and so on. Here we provide some information for landowners seeking to lease their land.

By Carol Loveland

Many of the questions we receive through our webpage, “Got Marcellus Questions?” ask how to find interested parties to lease one’s land.  There is really no pat answer to this, as natural gas development continues to be an evolving process.

If you are interested in leasing your land, find out who has leased around you, and to which natural gas companies they have leased their land.  Normally, a company would like to have a large tract of land for gas development.  Keep in mind that companies do work together, and may share drilling and/or land operations.  Talk to your neighbors to see which companies they have worked with, and what their experiences have been with these companies. 

The county recorder’s office will also have all recorded leases on file for public review.  It is best if you know the tax parcel numbers in looking up information. Another good source of information is the Pennsylvania Department of Environmental Protection (DEP) website, which lists companies with permits and wells  (http://www.dep.state.pa.us/dep/deputate/minres/OILGAS/RIG11.htm ).  The information may be on rather large spreadsheets, but once you become accustomed to them, you can determine what companies operate in each township.  Contact information for the companies may be found on our Service Directory webpages or by searching for the company's website.

Lease terms -- lease amounts, royalty percentages and addenda -- will differ from day to day and from place to place for a variety of reasons.  The market fluctuates greatly.   Because significant amounts of land are already leased, companies' leasing activity has decreased. Seismic surveying of land has meant that companies have a very good idea of the geology that best supports gas production, so current leasing activity tends to be very targeted to the most promising locations if these are not already leased.  As leases signed very early in the development of the Marcellus Shale are about to expire, companies are hurrying to get wells on the land to hold it in production. 

If no company is interested in the moment to lease your land, it may be best to wait until a later date.  It will take time to explore and develop the whole Marcellus shale play.  Keep in mind that other shale plays containing oil and gas are also becoming known and may eventually be developed as well.