Lisa Linn’s Blog

To view all property listings in my market area and other interesting stuff go to www.recreationalpropertiespennsylvania.com 

It’s the age of the new “Jed Clampetts” here in North Central PA as the Marcellus Shale makes for a modern day gold rush right here in our own backyards!  A layer of rock here called Marcellus Shale has been known for more than a century to contain gas, but it was generally not seen as economical to extract.  Now that there is improved technology developed since drilling in north Texas (the Barnett Shale), the odds have changed.

The thickest part of the shale seems to be located in Pennsylvania prompting leasing agents to sift through stacks of dusty deeds in courthouse basements to find landowners who have retained underground OGMs (oil, gas and mineral) rights.  Land owners in our area have reported receiving upwards of $2500 per acre for leases, plus have negotiated as high as 30% for royalties if there is a strike.  It is better than playing the lottery for most folks around here . . . if a good “vein” is struck, gas could be produced for 50 years from just one well!   This has been the topic of many conversations at the kitchen table, local pubs and the real estate offices. 

Realtors need to be abreast of the “breakneck speed” that is taking place regarding the leasing of mineral rights as this will have an effect on property values for years to come.  Also, there can be many creative ways to still make a property marketable for top dollar even if the seller retains some rights . . . it is all in the art of negotiating and now there is another tool that can be used.  

Landowners are now more conscientious when selling their properties and opting to retain all of the sub-surface rights (which supercede surface rights) rather than conveying them to the buyer.  This could mean they will not be able to get market value if they sell unless they are willing to share in some of the royalties, re-sell the leases to the buyer, etc., but may see it as a tradeoff for the chance to strike it rich. 

On the flip side, buyers are nervous that the gas companies will come in and rip up their flower beds and erect horrendous steel structures where their children play and they will not receive any benefit from it at all!  Yes, my friends . . . it is going to get interesting! 

In Pennsylvania, the state has agreed to lease 74,000 state forest acres and is currently accepting bids from leasing agents.  This is a huge advantage to the gas companies who obtain theses leases since they will only be dealing with one entity instead of “pools” of landowners. 

Before signing a lease or purchasing a property in which mineral rights are not going to be conveyed, always consult your attorney and be sure you are properly educated.

There is a wealth of information out there on the net, but the best advise comes from an attorney who is well-versed in OGMs and there are some unscrupulous leasing agents out there too that may stick some jargon in the “fine print” that you may not want to agree to.  A good Realtor understands the importance of this local phenomenon and can assist in properly marketing and disclosing the necessary information when selling property with mineral leasing and retained sub-surface rights. 

What are the comments out there . . .   tell me your stories.   Do you think retaining the mineral rights will change the outcome of market values in our area?   Have you already retained yours or are thinking about it?  Are you currently negotiating with leasing agents now?  Let me here from you!   

 Lisa Linn, Recreational Property Specialist, West Branch Valley and Southern Tioga Regions.  Davis Real Estate, Inc.  570-660-0626 (direct)

Welcome to Lisa Linn’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Mill Hall.