Shale Daily / NGI All News Access

Drilling on Game Lands Approved by Pennsylvania

The Pennsylvania Game Commission (PGC) approved four deals with Marcellus Shale operators at its April meeting, including one that could lead to drilling on state lands.

The eight-member board will allow Endless Mountain Energy to build up to three well pads on State Game Lands (SGL) in exchange for rentals, fees and a small tract of land. The commission also allowed Anadarko E&P Co., EXCO Resources and Chesapeake Appalachia to access oil and gas under SGLs from pads on adjacent property.

The four deals, valued at more than $18 million, involve lands in northeast Pennsylvania.

The PGC leased the mineral rights for 1,930 acres of game lands in Tioga County to Endless Mountain, a small Pennsylvania company, in return for a 585-acre tract adjacent to a different game land in McKean County in the north-central part of the state.

The PGC will get a $6,755,000 total bonus payment over the five-year agreement.

The other three deals do not involve any surface use of game lands.

Anadarko and EXCO leased neighboring 2,310- and 571-acre tracts in Lycoming County, agreeing to pay $8,644,500 in payments and rentals over five years. Chesapeake leased a 722-acre tract in Bradford County, agreeing to pay $3,611,500 over five years.

All three leases involve only mineral rights and not surface rights, allowing the companies to access oil and gas through directional drilling from pads on adjacent private property.

The PGC said the deals allowed the state agency to earn money during a tight budget cycle, and to keep from losing the oil and gas under its properties by waiting too long.

"Without a proactive approach to lease these State Game Lands, much of the Game Commission's potential oil/gas revenues would have been jeopardized by adjacent private oil/gas development that could have drained the Game Commission-owned oil/gas reserves from beneath SGLs," PGC Executive Director Carl Roe said.

The PGC owns some, but not all, of the mineral rights to the 1.4 million acres it manages in Pennsylvania. The agency receives no appropriations from the state general fund, and operates mostly on licenses, federal grants and revenue from its natural resources.

The board passed a resolution in April 2010 requiring that development "be accomplished with great prudence, minimum disruption to State Game Lands and a replacement of disturbed land and long-term sustainability of revenue for the Wildlife Game Commission."

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