Important Natural Gas Terms

Information about the Marcellus and Utica Shale formations, which are the underlying resource that created the natural gas play in PA.

Seismic Testing

Seismic testing is performed and/or reviewed by gas company geologists and other professionals in order to determine the existence and location of natural gas reservoirs. Gas companies also use the seismic testing results to establish the most effective drilling plan in an area.

Seismic testing involves seismic waves emitted from a source such as underground explosions or "thumper" trucks on the surface. These seismic waves travel down towards the center of the earth, but also reflect back towards the surface from the different underground layers. Geologists use sensitive equipment, called geophones, to record these reflections to identify and map underground geology. The geophones transmit the test data to seismic recording trucks which is then interpreted by geologists, geophysicists, and petroleum reservoir engineers.

Geologists seek to accurately map the underground formations with particular emphasis on the formation(s) associated with natural gas reserves. In Pennsylvania the current obvious focus is the Marcellus Shale formation. However, we are absolutely aware that gas companies are looking to explore other, and even deeper, formations from which they can extract natural gas. Seismic testing and mapping allows the geologists and companies to pin point areas to drill for gas production and is an invaluable tool for the gas company.

When approached by a company requesting to conduct seismic testing on your property, we recommend that you determine if the seismic testing company is working directly for the gas company that holds your gas lease. The seismic testing firm may be acting independently and not on behalf of the company who holds the gas lease for your land. Whether to permit seismic testing on your property is an individual choice that may or may not be authorized by your gas lease. Before agreeing to permit seismic testing, we recommend that you ask probing questions and determine whether you are obligated to comply with the seismic testing under the terms of your gas lease. If you are not obligated to agree to the testing, you must inquire as to what benefit is it to you to allow the seismic testing to occur.

Remember, do not by bullied into signing ANY document without fully understanding its consequences. Contact The Clark Law Firm now!

Hydraulic Fracturing

Hydraulic fracturing, also called "fracking", "fracing", and "hydrofracturing", is the process of injecting a watery mixture of sand, lubricants, and special chemicals at extremely high pressure into the Marcellus Shale rock many thousands of feet deep below the surface for the purpose of creating cracks that allow for the extraction billions of cubic feet of natural gas, a very clean burning, highly valuable energy resource, found in the Marcellus shale region of Pennsylvania, Ohio, New York, and West Virginia.

Here is a video from the American Petroleum Institute explaining how horizontal drilling and hydraulic fracturing work.

Gas companies are extremely interested in using horizontal drilling and hydraulic fracturing on your land in the Utica and Marcellus shale regions of the state of PA, to extract the valuable natural gas, and NGL (natural gas liquids) resource trapped deep inside the Utica and Marcellus shale layers of rock.

Attorney Doug Clark has years of experience helping hundreds of landowners like you in obtaining the best protection for your land. The Clark Law Firm has represented Pennsylvania landowners just like you to obtain tens of millions of dollars in royalty and bonus payments from gas and pipeline companies that were highly resistant to negotiation a fair deal for the landowner - until they learned the landowner was being represented by Attorney Doug Clark.

To find out more how The Clark Law Firm can assist you, a friend, or a family member, contact The Clark Law Firm now.

Rule of Capture

 

The Rule of Capture, or Law of Capture, DOES apply to the Marcellus Shale formation in Pennsylvania.

However, the Rule of Capture's impact is far to often misunderstood by Pennsylvania landowners, and even lawyers.

The Rule of Capture generally permits a landowner to drain or "capture" oil and natural gas from a neighboring property owner without liability or recourse.

HOWEVER, the Rule of Capture is often over stated by landmen and others when discussing the rule's impact in the Marcellus Shale formation.

Because of the need for horizontal drilling and hydraulic fracturing, THE RULE OF CAPTURE IS OFTEN ONLY A VERY MINOR CONCERN, IF ANY, FOR LANDOWNERS INVOLVED IN MARCELLUS SHALE GAS EXTRACTION!!!

The vast majority of natural gas extracted from the horizontal directional drilling and hydraulic fracturing (fracking) techniques will be limited to a few hundred feet from the well bore. Thus, the natural gas tightly trapped in the Marcellus Shale formation under your property generally will not migrate and escape to a neighbor's well without dirctional horizontal drilling and hydraulic fracking directly under your property or to a well bore within a few hundred feet of your property.

Natural gas companies do NOT have the power to horizontally drill under your property if you have not entered into an Oil and Gas Lease! Moreover, advancements in directional drilling provide natural gas companies remarkable flexibility to direct horizontal wells to conform to uniquely shaped property boundary lines and odd property and unit configurations.
 

Contact an experienced oil and gas lawyer at The Clark Law Firm, who truly understands the Law of Capture, NOW

Do not be tricked or intimidated into signing an Oil and Gas Lease under the mistaken belief or misinformation that your Marcellus Shale natural gas will escape to the property of another under the Rule of Capture.

 

Clean and Green Roll-Back Taxes and Penalties

 

It is critical that all landowners understand potential "Clean and Green" tax implications.

Attorney Douglas Clark understands the Clean and Green Statute and it's consequences. The Clark Law Frim fights to construct ALL agreements with gas and pipeline companies to protect themselves from potentially significant tax bills.

NOT ALL CLEAN AND GREEN PROVISIONS ARE CREATED EQUAL!!! Clean and Green language must be carefully crafted and negotiated to provide complete protection for the property owner.

Do not be fooled into believing you have complete Clean and Green protection simply because your Oil and Gas Lease or pipeline right-of-way agreement contains an addendum entitled "Clean and Green." Many landowners are very disappointed and surprised to learn that the Clean and Green provision in their Oil and Gas Lease or other agreement is insufficient and fails to insulate them from "any and all" taxes and penalties.

By way of explanation of the program, the Pennsylvania Farmland and Forest Land Assessment Act of 1974, more commonly known as “Clean and Green,” is a preferential tax assessment statute that affects the rights of some Pennsylvania landowners. Clean and Green applies to all counties in Pennsylvania. HOWEVER, each county assessment officer is responsible for administering the program within its jurisdiction. This has resulted in different interpretations and applications of the Clean and Green statute by counties across Pennsylvania.

It is important that landowners seek to determine how their County is interpreting and enforcing the Clean and Green statute relating to gas development activities. However, a county's current interpretation of the Clean and Green Statute may unexpectedly change in the future. These contingencies must be accounted for, whenever possible, when negotiating a contract with an energy company. The Clark Law Firm understands the techniques and "tricks" used in company favored provisions and will combat and counter unfriendly company proposed Clean and Green language.

Clean and Green is a Pennsylvania state law that allows qualifying land that is devoted to agricultural and forest land use to be assessed at a value for that use rather than the fair market value. In other words, Clean and Green is, in essence, a land conversation program that reduces the property tax rate for the landowners who enroll in the program. The intent of Clean and Green is to encourage property owners to retain their land in agricultural, open space, or forest land use, by providing real estate tax relief. Thus, if a landowner enrolls in the program, he/she is then obligated to devote their land to agricultural use, agricultural reserve use, of forest reserve use in order to qualify for reduced property taxes. Landowners who exit the program may be required to pay up to seven (7) years worth of “roll-back” taxes, plus interest.

Landowners who wish to enroll into the Clean and Green program must submit an application to their county assessment office. Once a landowner is enrolled, the general rule is that the landowner is obligated to continue using the land in a qualified use indefinitely or face roll-back taxes for the most recent seven (7) years, plus interest.

 

Once enrolled into the Clean and Green program, a landowner cannot voluntarily remove their land from Clean and Green without a land use change. When a land use change takes place, and rollback taxes have been paid, the landowner has the option of removing any portion of the land that remains eligible, or the land that remains eligible may be re-enrolled.

A landowner who breaches the Clean and Green covenant of land use is subject to a roll-back tax. A roll-back tax is imposed for changes in the use of Clean and Green property. The roll-back tax is the difference between the real estate taxes the owner would have paid if the property was assessed under the Fair Market Value valuation system and the reduced taxes the owner paid under the Clean and Green Use Value assessment.

As a general rule, the roll-back tax is imposed on the entire portion of the land enrolled under the application. However, county interpretations and enforcement of this general rule may very. To defend against a potentially heavy tax burden, ALL contracts should account for the possibility that all lands may be taxed in the future. Remember, a county who enforces the Clean and Green Statute one way today, may change it's interpretation of the Clean and Green statute in the future. It is imperative that the landowner's contract specifically addresses these issues in as much clarity and detail as possible.

Roll-back taxes are due for the year of the change in use and the six previous tax years for a total of seven (7) years. Land that has been enrolled in Clean and Green for more than seven (7) years is only subject to roll-back taxes for the seven (7) most recent tax years, and land that has been in Clean and Green for less than seven (7) years is subject to roll-back taxes only for the years it has been in the program. In addition to the tax, interest is imposed on each year’s roll-back tax at the rate of six percent (6%) per year.
 

 

Marcellus Shale Formation

 

The natural gas rich Marcellus Shale formation runs through the majority of Pennsylvania

and extends from West Virginia across Pennsylvania to the Southern tip of New York. The Marcellus Shale formation is an organic-rich black shale that was deposited over 300 million years ago and thought to be the 3rd largest gas field in the world.

The depth and thickness of the Marcellus Shale formation varies throughout Pennsylvania. The target depth for horizontal drilling in the Marcellus Shale, as illustrated in natural gas company drilling permits, establishes the drilling range between 5,000 to 10,000 feet below the ground.

The thickness of the Marcellus shale formation ranges from 20 feet in northwestern Pennsylvania to over 250 feet in northeastern Pennsylvania.

{rokbox title=|Marcellus shale natural gas formation in PA|}images/stories/marcellus_maps/image013.jpg{/rokbox}

Thanks to advances in drilling technologies, including directional horizontal drilling and hydraulic fracturing ("fracking"), and high energy costs, the natural gas rich Marcellus Shale formation is now heavily targeted by energy companies for natural gas extraction.

Estimates vary widely, but it is believed that the Marcellus Shale may hold up to 500 trillion of cubic feet of natural gas - enough to power the entire United States for approximately 20 years.

It is widely thought the Marcellus Shale natural gas horizontal drilling extraction may greatly reduce the United State's dependency on foreign oil.

If you are a landowner in the Marcellus shale region of Pennsylvania - you may be elegible for representation by The Clark Law Firm.

Conatct us now about your current situation.