RACHEL L. ALLEN, ESQ. AND SCOTLAND M. DUNCAN, ESQ.
Over the years, many forms of oil and gas leases have developed. Use of a “standard” form—a generic term descriptive of a general class of instruments rather than any one form2—simplifies negotiations with smaller landowners. Owners of large tracts, including major corporations, however, should not sacrifice value for expedience. As the Marcellus Shale formation continues to develop, oil and gas companies and large landowners may find the standard lease lacking. Far too often the standard form oil and gas lease results in the adoption of terms that may not address material concerns of the landowner-lessor. Thus, the authors urge large industrial landowners and producers to consider modifying the following clauses within the context and confines of their unique business objectives.
KEVIN J. GARBER, ESQ., STEVEN BAICKER-MCKEE, ESQ. AND JEAN M. MOSITES, ESQ.
As this country searches for reliable energy sources in the face of political, technological, and environmental challenges, development of the Marcellus Shale in Pennsylvania has expanded rapidly in recent years. The Pennsylvania Department of Environmental Protection (“PaDEP” or “Department”) issued 3,314 permits for Marcellus wells in 2010, and 1,446 Marcellus wells were drilled in 2010, up from 795 drilled in 2009. Of the 71,000 active gas wells in Pennsylvania, however, only 3.5% are Marcellus wells. This article will review the interrelationships among Marcellus Shale development in Pennsylvania, water resources of the Commonwealth, and the evolving regulatory regimes that manage the drilling activities affecting those resources.
BENJAMIN F. HANTZ
The exponential growth in interest in Pennsylvania‘s Marcellus Shale deposits caused many landowners to challenge the validity of their leases under Pennsylvania‘s Guaranteed Minimum Royalty Act. The central issue in deciding whether the leases were valid was whether gas companies were permitted to deduct certain post-production costs from royalty payments made to landowners.
NANCY D. PERKINS, ESQ.
For the past year or more, it has been virtually impossible for those of us who live in southwestern Pennsylvania to escape news stories about the Marcellus Shale, a vast formation that sprawls beneath parts of West Virginia, Ohio, New York, Maryland, and more than thirty southwestern and northeastern Pennsylvania counties.
In April 2008, Southwestern Energy, a Houston based drilling company, began natural gas drilling operations with a well in rural Susquehanna County, Pennsylvania. This well was drilled using a tech-nique called hydraulic fracturing, which is a method of drilling that increases production by fracturing, or cracking, rock formations that contain oil and gas.
GINA S. WARREN, ESQ. AND KRISTA M. BARON
The Marcellus Shale is by far the largest natural gas shale play in the United States and the largest known shale deposit in the world. Located beneath a large part of the Appalachian basin, it extends north into upstate New York, south into West Virginia and Virginia, and west into Ohio, and geologists estimate that it may contain as much as 489 trillion cubic feet of recoverable natural gas.