Shale Daily / NGI All News Access

Pennsylvania Opens Game Reserve to Oil, Gas Leasing

The Pennsylvania Game Commission (PGC) is opening about one-sixth of a game reserve in Bradford County, in the heart of the Marcellus Shale, to oil and natural gas leasing.

State Game Lands No. 36 totals about 18,987 acres and straddles Monroe and Overton townships. The PGC said earlier this month that it would accept sealed royalty bids on Tract 36B-12 of the game reserve, totaling around 3,177.7 acres, until 1:30 p.m. on May 30.

PGC spokesman Jerry Feaser told a local newspaper that the commission would benefit from the revenue it earns through lease payments and royalties, but the game reserve itself would benefit as well. However, Feaser told NGI's Shale Daily that any potential bidders should review the information packet and instructions that the PGC has put together on the leasehold in question.

"Generally speaking, when we go and put together packages that we put out for bid for gas rights we own, we proactively make conscientious decisions to avoid impacting any sensitive habitat areas," Feaser said. "Having said that, I don't know if there are any sensitive habitat areas there necessarily. There may or may not be."

The PGC said successful bidders agree to spud a well within five years; make a bonus payment of $2,000 per net acre within 120 days of being awarded a bid; pay a well pad location fee of $250,000 per well pad (only two well pads, 10 wells per pad allowed, maximum); and, if applicable, pay a shut-in rental fee of $25 per net acre. Operators must pay oil and natural gas royalties of at least 20%, and must hold a surety or performance bond of $50,000.

Operators have to provide the PGC 350 Mcf of free natural gas a year for buildings owned by the commission, or reimbursement from any gas not used by the PGC. They also have to pay twice the stumpage value for marketable trees within six months of their removal and contribute to a revegetation plan for each well site. If operators need water impoundments, they are required to pay $25,000 a year. Drilling would also face restrictions during hunting season.

The PGC said all potential bidders have to submit a check for $5,000 by the deadline. Checks would be returned to unsuccessful bidders.

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