Gas royalties are rolling into Bradford County, a leading shale gas county in Pennsylvania. According to one calculation, $160 million has been paid in royalties to landowners there, where 512 gas wells are producing.
http://stateimpact.npr.org/pennsylvania/2012/09/25/drilling-generates-160-million-in-bradford-county.
Given that Bradford county had a population in 2010 of 62,622, or about 1 of every 200 Pennsylvanians, the $160 million total works out to the equivalent of $2,555 per person within the county. Of course, royalty payments went not to every resident but to less than 1% of those in the county.
Both the amount of royalties paid and the number of residents in Bradford county that will receive a royalty check will soon increase significantly, since a total of 1,856 wells have already been drilled. But 1,344 of those wells were not counted as producing, when the $160 million royalty total was calculated.
Landowners who lease their property for gas drilling also get a lease payment that is separate and apart from any royalties received.
Another key factor in this number is that northeast PA gas has been selling at a significant discount to the NYMEX spot price due to companies competing over limited pipeline capacity. I've heard stories of gas selling for well under a dollar per Mcf. Once these new pipeline projects come on line and the price for gas up there in NEPA stabalizes, and those other wells come on line, that number is going to rise exponentially.
ReplyDeleteI'd LOVE to see a blog posting about the disparity between wellhead pricing in NEPA vs. prices seen at the NY city gate!