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The Elk County Gas Task Force's meeting Thursday night at the St. Marys Area Middle School drew landowners from across the region hoping to better understand the resources at their disposal, as well as their rights as property owners in the Marcellus Shale era.
Guest speakers Tom Wagner, Esq., of Meyer and Wagner in St. Marys, and Professor Ross Pifer of the Penn State Dickinson School of Law, spoke with attendees about various legal aspects dealing with Marcellus Shale, beginning with the initial stages of lease negotiations.
Pifer and Wagner stressed the art and importance of negotiation to those in attendance.
"You should be giving equal attention to what you are giving up as to what you are getting," said Wagner.
The speakers suggested that any landowner entering into negotiations with a gas company should confer with an attorney and work to clearly define the parameters of the lease. Wagner also offered a caveat to potential lessors.
"We've see leases that are really deeds where the landowner is only given the front page," Wagner said.
Pifer, in turn, urged them to require liability and indemnification clauses in any potential lease, wherein the burden of liability is imposed on the driller rather than the landowner. This in order to protect themselves from punitive or adverse financial effects, property damage or injury to third party liabilities.
An attendee voiced trepidation regarding individual property owners being outleveraged in negotiations with large oil and gas corporations.
"We are green when it comes to this. I had a man, my son called him a 'flim-flam' man, tell me that I was the first person to turn down a check. They're good at it and know what they're doing," she said.
"The goal when drafting a lease...it is your opportunity to protect yourself. After it's signed, you lose a lot of that opportunity," Wagner said.
He added that it is important that landowners know they can add terms or draft addendum, and that companies will often be willing to agree to landowner's requests.
Wagner also encouraged them to parse the language of agreements and related legal documents, especially information relating to mineral rights.
"When you start seeing big dollars, your eyes get like saucers, but you have to check the language out first," said Wagner. "When you sell land, all the rights go with it unless you hold them back."
Pifer said the first natural gas extraction from the Marcellus Shale formation in Pennsylvania took place in 2005 in Washington County. In 2005, there was a total of two wells statewide. The number of wells has grown exponentially since then, with 34 in 2007, 210 in 2008, and 1,454 as of last year. At present natural gas wells have been drilled in 30 counties in Pennsylvania.
Jodie Foster of the Elk County Gas Task Force said the group is neither a proponent nor opponent of natural gas drilling, but rather a neutral entity trying to present facts to the public. The next meeting of the Task Force will take place in October on a date to be announced.