Central New York may be sitting on one of the richest natural gas finds in the United States, and ``landmen'' are offering leases to area farmers and other property owners.
``We have three landmen working in Otsego County now,'' Ron Bishop, an employee of Denver-based WhitMar Exploration said Tuesday.
The landmen approach property owners, typically asking them to sign five-year leases, which will allow the leaseholders to come onto the property and drill for gas. They've been busy in Delaware and Chenango counties and are active in Otsego, too.
Bishop said he couldn't disclose how much money the company usually offers because conditions vary from property to property.
``Every lease is individual,'' he said.
However, according to Steve Sinniger, president of the Otsego County Farm Bureau, the going rate varies from $25 an acre to about $2,400 an acre, depending on the geology and the skill of the bargainer.
``There's a big difference in what people are being paid; that's why we want to get the word out as soon as possible,'' he said.
Toward that end, the Otsego County Farm Bureau will hold a seminar at 7 p.m. June 5 at Unatego Junior-Senior High School. At that meeting, Jeff Decker of Vestal, a founding member of a property owners' coalition in Vestal, and other knowledgeable people will speak and answer questions.
``We just want to let people know what's available, so they don't regret signing a lease,'' Decker said.
Property owners in southwestern Otsego and southeastern Chenango counties may be paid more than $2,000 an acre, he said, if they refuse to go along with lesser offers.
Sometimes by pooling resources and working together, landowners may do very well, he added.
On Tuesday morning, Fred Schoellig of Route 51, whose farm is just north of Garrattsville, leased 700 acres to WhitMar at $50 an acre.
``They're paying more to the south of us, but I think that was pretty good for this area,'' he said.
And if the leaseholder drills and finds gas, Schoellig will make far more money and have access to free gas for his own use.
According to Whitney Marvin, WhitMar's founder, Schoellig is correct.
``The lease bonuses are only a fraction of what's at stake here,'' he said. ``The Deposit area in Delaware County is the hottest spot in New York State right now, but we are very hopeful about Otsego and Chenango counties, too."
The oil-rich Marcellus Shale formation lies beneath land in the Deposit area. This formation continues to the north, but thins out and is supplanted by Queenston Sands, an intriguing but less certain prospect, Marvin said.
For years, geologists have suspected that beneath central New York's pastures and woods lay significant natural gas deposits. But they are not close to the surface, and only with advances in drilling technology and the rising cost of energy has the area become attractive to drillers.
As interest in drilling here has increased, so have the bonuses offered to landowners. Just two years ago, Otsego County was offered $10 an acre for a five-year lease that would allow test drilling on county-owned land.
The county board turned this down and now the bottom price being offered is 21/2 times that. The top prices are approaching the value of the land itself, noted James Powers, chairman of the county Board of Representatives.
"My advice to people is to move slowly,'' Powers said. ``The price is rising and it's only going higher.''
Powers said he has been told that landmen are willing to pay more than $2,000 an acre in the town of Butternuts.
However, not everyone wants to get in on the gas rush.
Sue Nogaret, who operates RPI Realty in New Berlin, said the proposed leases she's seen are very one-sided and difficult for a lay person to understand.
``I think anyone who wants to do this should have a qualified lawyer look over the lease,'' she said. ``You may not be getting what you think you're getting.''
Nogaret said she turned down an offer on her own land in the town of Pittsfield. So did Linda Rowe of Gilbertsville.
``They offered us $50 an acre and a 13.5 percent royalty on the gas, but we want to protect this farm,'' she said.
Rowe said she worries that a gas-drilling operation might ruin water wells.
According to the Syracuse Post-Standard, this did happen in the town of North Brookfield in Madison County two years ago when a drill bit got stuck about 400 feet down. To free the equipment, the crew from Ardent Resources pumped compressed air into the ground and nearby water wells erupted like geysers, the Post-Standard reported.
It took many months for most of the wells to return to normal.
Last year in Otsego County, drillers hit natural gas on the Pullis farm on McShane Road in Springfield, but how much is still uncertain, Allan Pullis said Wednesday.
``They were pleased when they hit it and we should know more soon,'' he said.
Pullis said he has been told that more wells between his farm and Sharon Springs will be drilled soon.
Marvin said this area may be poised to boom.
``I think Central New York has everything going for it,'' he said. ``You're close to pipelines and close to one of the biggest markets in the country.''
What remains, he said, is to drill and confirm that the gas is plentiful.
