Landsmen urge Damascus Township to sign a gas lease

Damascus supervisors decline the opportunity

By TOM KANE

DAMASCUS, PA - Two landsmen representing Chesapeake Oil Company appeared before the Damascus Township Board of Supervisors on March 16 and urged the township to sign a lease agreement. They were representatives of the Elite Land Service Company, which subcontracts with Chesapeake to get people to sign.

J.C. Westbrook distributed a model lease agreement to the residents who were present.

The township has about 130 acres in four separate properties where drilling could take place, Westbrook said.

“The price per acre is now $1,000 but it may change downward in the future,” he said. “At that price, the township would realize $130,000 just to sign the lease. If gas is struck, the township would get 14 percent of the yield from any well as long as the well is in production.”

Westbrook said that any agreement was subject to change.

Earlier this year, the price received by landowners signing leases was as high as $2,000 an acre. It is not a secret that gas drilling companies are hurting since the price of gas has plummeted.

The supervisors made no comment after the landsman’s presentation and the landsmen left the meeting.

After the meeting, township chairman Jeff Dexter commented on the proposal.

“We’re not going to sign anything, especially now that the price is so low,” he said. “We can’t sign any agreement with any vendor unless we go to bid. We would have to get bids from a number of drilling companies and chose the lowest bid. We don’t plan on doing that.”