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Pennsylvania Opens More State Forest Land to Gas Drilling

Pennsylvania's Department of Conservation and Natural Resources (DCNR) last Monday announced that it is making nearly 32,000 acres of additional state forest land available for natural gas leasing.

The department plans to open six tracts of land, totaling about 31,967 acres, for a lease sale of subsurface oil and gas rights, said DCNR Secretary John Quigley. The tracts are in the Elk, Moshannon, Sproul, Susquehannock and Tioga state forests in five counties -- Cameron, Clearfield, Clinton, Potter and Tioga -- in the central and northern region of the Keystone State, which is part of the prolific Marcellus Shale play.

The nearly 32,000 acres account for a small fraction of Pennsylvania's 2.1 million acres of state-owned forest land, according to the DCNR.

Prospective bidders must provide the DCNR proof of registration to do business in Pennsylvania before 5 p.m. EST on Dec. 12. Pre-qualified bidders may submit sealed bids for leases on each of the six tracts to the DCNR until 2 p.m. on Jan. 12, at which time the bids will be opened publicly, the DCNR said. Winning bids will be posted on the DCNR website within 24 hours.

Leases will be awarded to the highest bidder based on the amount of the first year's land rental. The department said the lease sale requires a minimum bid of $2,000 an acre and royalties of 18%. The primary lease term is 10 years, although it may be extended based on the production of any wells on the tract, the DCNR said.

Revenues generated from the lease sale go to the Oil and Gas Lease Fund. The state's fiscal year 2009-2010 budget requires the DCNR to raise $60 million from a lease sale on state forest lands, the department said.

The DCNR has held 73 lease sales since 1947, the last of which was in 2008. About 660,000 acres of forest land currently are under lease for gas production, with about 750 wells in production, the state said.

More information is available at www.dcnr.state.pa.us or by calling (717) 772-9101.

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