June 15, 2009
Owner groups say gas-drilling deals near; 30,000 acres around Binghamton
included
Binghamton Press & Sun Bulletin
By Tom Wilber
[email protected]
Property owner coalitions representing three towns in the heart of Broome
County are closing in on a deal with a multinational energy company that
would open nearly 30,000 acres around the City of Binghamton for natural
gas development.
Members of a coalition in the towns of Binghamton and Conklin,
collectively owning about 18,000 acres, are scheduled to meet Friday to
consider an offer by Hess Corp., said coalition leader Dan Fitzsimmons.
Hess is partnering with Seneca Resources Corp. in the deal.
Because the deal is not final, terms could not be made public late last
week, Fitzsimmons said. "This is a huge opportunity for the area," said
Fitzsimmons,
who has been a strong proponent of encouraging natural gas drilling and
its economic potential. He expected between 30 and 60 wells would be
drilled in Binghamton and Conklin in coming years if the deal goes
through.
The offer has also been extended to 450 members of a coalition in
Kirkwood who collectively own about 11,400 acres, said coalition leader
Marchie Diffendorf. The money is fair enough, he said, but the parties
are still trying to work out terms of the lease. No meeting is scheduled
yet, he added. He would not disclose terms of the deal.
Last May, a group of 500 Deposit landowners agreed to a deal with XTO
worth $110 million in lease payments and 15 percent royalties on
production. The deal now on the table for some property owners in the
towns of
Binghamton and Conklin has economic clout as big or bigger than the XTO
deal, Fitzsimmons said.
Last summer, when natural gas prices were high, area land was being
leased for between $2,000 and $5,000 an acre by companies seeking access
to the Marcellus, a gas-rich formation running under the Southern Tier
and throughout Pennsylvania and the Appalachian basin.
An especially thick finger of the Marcellus extends north through Dimock
Township in Susquehanna County, Pa., through areas just east of
Binghamton. Cabot Oil & Gas is producing gas from the Dimock area
around the clock, with dozens of wells being brought on line and dozens
more being drilled.
Fitzsimmons and others have touted the economic potential of gas
drilling, including lease payments and royalties going directly to
residents, new jobs, a broader tax base and ripple effects from
out-of-town workers patronizing local hotels and restaurants.
Other groups fear environmental ruin from drilling and a process called
hydro-fracturing, used to stimulate well production. Unlike traditional
wells drilled into the Trenton Black River throughout the Western
Southern Tier for generations, Marcellus production would require heavier
equipment and millions of gallons of a chemical solution
injected into bedrock to create fractures and free the gas.
While Marcellus production ramps up in Pennsylvania, permits are not
being issued in New York until the state Department of Environmental
Conservation completes an environmental review of the process, expected
later this year.
Additional Facts
Energy companies court Tier
* Hess is a global energy company headquartered in New York City, with
operations in the United States, United Kingdom, Norway, Denmark,
Equatorial Guinea, Gabon, Azerbaijan, Thailand and Indonesia. The company
listed $31 billion in revenue in 2008. It's traded on the New York Stock
Exchange as HES.
* Seneca Resources specializes in oil and natural gas exploration and
development with operations in the Gulf Coast region of Texas and
Louisiana, the Appalachian Region, the Southwest and California. The
company is headquartered in Houston, Texas, and is a subsidiary of
National Fuel Gas Company based in Williamsville, N.Y.
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