I recently had a conversation with a person who was formerly employed by a major pipeline company in Western Pennsylvania but left that job to return to Houston to start a company specializing in developing Marcellus and Utica production prospects in Western Pennsylvania and Ohio. When I expressed some astonishment at his decision, he floored me when he told me that he just closed a $100,000,000.00 funding deal with an investment group from the Northeast.
Just about every day another article appears in one of the many news periodicals I follow about the gas producers ramping up for an impending surge in gas production activities. The active rig count in Pennsylvania is increasing. Gross production figures indicate that shut in wells are coming back online. Shell is building a multi-billion dollar ethane cracker plant in Beaver County, Pennsylvania. Shell also recently announced that it is moving forward on its 94 mile gas pipeline that will transport gas from Houston, Pennsylvania and Scio and Cadiz, Ohio, to its cracker plant. The contract landman companies are quietly running blind ads recruiting the legions of newly minted landmen who will be unleashed on the folks.
All of the indicators lead me to believe that Smart Money and the gas producers are becoming more bullish on the Marcellus and Utica gas plays. I can’t tell you what they see, because I don’t know. But I can tell you with absolute certainty that Smart Money doesn’t generally act frivolously. Otherwise, they wouldn’t be Smart Money any more.
What does this mean to the landowners? The answer is quite simple. It is clear that the producers and Smart Money see an opportunity in the near future for an increased demand for gas as prices make production profitable for them. Once the money starts rolling back into Western Pennsylvania and Ohio again, the producers, and the Smart Money financing them, will need land on which they can drill. This means that the producers, most likely through their contract landmen, will be actively leasing land.
Faced with the likelihood that landowners will be relentlessly pursued for their mineral rights, landowners need to be better prepared for this round than they were in the last round. Thankfully, most of the boom opportunists, unqualified lawyers, landowners’ groups and landowners’ “representatives” are gone, at least at the moment. Remember the “experts” who came up from Texas to show the Western Pennsylvania “hillbillies” how they do things in Texas? Thankfully, they are all gone, hopefully for good.
The boom is coming and it’s perfectly fine to follow the Smart Money and the gas producers’ lead as we head into the next surge. Only this time, the landowners need to participate on a level playing field instead of merely donating their land and making Smart Money richer at the expense of the folks.
The only way to protect yourself from falling victim to unscrupulous oil and gas operators is to retain us as your attorneys today. Once you are represented by us, the producers and their landmen will have to go through us to get to you, and I can unconditionally guarantee that we will protect you from these predators.