Attorney George Conti has two pertinent pieces of advice to landowners mulling over offers from gas well drillers, and both come down to the same thing: be careful.
"These are not leases," Conti of Greensburg told a crowded seminar at the Westmoreland Conservation District headquarters Thursday night. "These are deeds, and because they are deeds, they go on and on."
Not infrequently, Conti noted, he is called on to examine documents that were negotiated and signed in the early 1900s.
Conti's second bit of advice was never to sign a gas company lease "as it is presented to you."
Negotiating is the name of the game.
An overflow crowd attended the seminar sponsored by the Westmoreland Woodlands Improvement Association. The size of the crowd was one sign that many landowners have been approached by gas company drillers as well as independent drillers, all lured by the prospect of natural gas prices that are on the rise.
Conti said landowners should not be seduced by the lure of instant wealth that surrounds the Marcellus Shale gas reservoir.
In January, a Penn State University geoscientist, Terry Engelder, published a paper extolling the reservoir, which underlays the northern Appalachia region, including Southwestern Pennsylvania.
As much as 50 trillion cubic feet of gas could be at stake, the professor wrote.
Conti warned the reservoir is a mere "buzzword." He suggested landowners are getting caught up in the hype and are failing to bargain the best deal possible for themselves.
Landowners need to be alert, Conti said, as well as knowledgeable.
"How many acres do you have? The more acres you have, the better for you.
"What strata is (the company) interested in? Are they interested in shallow or deep gas?"
"You need to know what (the driller) needs to produce gas. Give him what he needs, but don't give away the store."
Conti suggested that because neighbors are reluctant to talk with each other, drillers play one off against the other.
The attorney urged adjacent landowners to talk to one another and eventually to band together. There is strength in numbers, he said.
Conti said companies attempt to maximize their profits and minimize the cash going to landowners. The ideal situation for the landowner, he said, is to get paid an assured amount each year regardless of markets, the price of natural gas or the difficulties associated with drilling.
"It's all (about the) money," Conti concluded.
Conti's advice went down well with Bonnie Shawley of Unity Township, who has been approached by six gas drilling companies since the beginning of the year.
"I learned about some of the pitfalls," she said.
Shawley owns 106 acres close to the Arnold Palmer Regional Airport.
According to Shawley, she and a neighbor who has been approached by the same six companies have talked things over. She hopes as many as four other landowners may join in the discussion.
One thing Shawley said she will insist on is language that would eventually terminate the right of the driller to enter her property. She called such an arrangement a "non-renewable lease."
"It's my own term," she said.
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