Landowners encouraged to check paperwork

HUGHESVILLE – Landowners who signed agreements with gas companies for drilling should take the time to study their royalty payments to ensure they are receiving their fair share of dollars.

“Be proactive. This is the biggest asset you have,” said Steven Karabin, president of Rhino Group, an oil & gas minerals management company. “Don’t rely on everything being correct.”

Karabin spoke Thursday to some 50 people at the Hughesville Volunteer Fire Hall during Penn State Extension’s Shale Mineral Management for the Landowner workshop.

He addressed some of the basic information on a typical royalty pay stub issued by gas companies to landlowners who signed agreements for drilling on their properties.

He said it’s important for landowners to know, first of all, how much of a royalty fee to which they agreed. Secondly, property owners should ascertain if they signed off on deductions from those royalties.

Unfortunately, many agreements allow for deductions, and in many cases people receive less than they feel they should be paid.

Karabin didn’t say gas companies intentionally attempt to short-change or cheat landowners, but he made it clear many aren’t receiving what they should.

“It’s worth your while to look into these things,” he said.

Matt Henderson, shale gas assets manager, Penn State Marcellus Center for Outreach and Research, noted that natural gas continues to be much in demand worldwide.

“There is a push to use more natural gas,” he said.

Meanwhile, much of the gas drilling in the local area in the past two to three years slowed down.

“We have seen a decrease in drilling activity in Lycoming County,” he said. “It doesn’t mean it won’t come back.”

Many of the gas companies formerly here went to western Pennsylvania and Ohio to drill for wet gas which yields a higher profit margin.

Henderson said the natural gas industry will be closely watching this year’s gubernatorial race between Gov. Tom Corbett and Tom Wolf. He noted that Wolf has pledged to introduce a 5 percent severance tax on natural gas which Henderson said could bring about a slow-down in the industry.

Still, the state’s overall gas rig count has remained steady, and pipeline construction is increasing.

About 1,000 wells in the state are without pipelines.

Henderson said the debate about whether to export natural gas continues.