March 08, 2012

A voice from gasland

The Spousal Unit recently made a trip to northern West Virginia, which is ground zero for the Marcellus Shale natural gas boom, which is transforming the face of several rural counties in the state. While there, she came upon a flier warning landowners not to be taken to the cleaners by drillers.

The flier quotes the CEO of gas giant Chesapeake Energy as saying

"I don't like to buy acreage for fair price, I like to go in and put a play together where we put our army of 5,000 landman to work, and we are buying it lease by lease for a very inefficient cost average to the rest of the industry to try and replicate and we make it a transaction where there is not a public market, it's us and the landowner and we're gonna most generally going to get the benefit of that side of the transaction, so think about again, every time we move we are buying acreage worth 5 to 10 times what we pay"

Sounds like the modern version of coal company land grabs at the turn of the 20th century. What was that saying about those who don't learn from the past?

1 comment:

hollowdweller said...

Yeah I've gone to a few things by the Div of Forestry and sort of got disillusioned because it seemed like the whole thing was designed to help you make your timber be more appealing for the companies to buy rather than giving you some idea how to wring the most money out of the buyer.