Published on Nov 4, 2014
Mr. Aikens received checks for ten cents and $1.10 from a division of Chesapeake Energy as royalty payments for his three Marcellus shale gas wells, after the company deducted post-production costs from his royalty payments.
Read the full story here.
"In Litchfield Township, Glenn Aikens, a member of the Bradford County Planning Commission, also has three shale gas wells on his land. Signing a lease brought a host of unexpected costs, Aikens says : $22,000 to set up an L.L.C. to make sure that his children could inherit the farm's suddenly valuable acreage in spite of estate taxes, pre-drilling water testing for the farm's seven wells (“He charged me $14,500 dollars, but I wouldn't have had a leg to stand on had I not,” says Aikens. “If they ruin the water, what do I do with this farm?”), and perhaps most painfully, the permanent loss of a valuable tax credit for farmland, now that the leased land is considered commercial property instead. Land that was assessed at $500 an acre was now assessed at $2,500 – and taxes were due retroactively."
Mr. Aiken had to pay literally thousands and thousands of dollars for the privilege of having gas wells on his property. One royalty check from Chesapeake Energy was for 10¢. The cost of testing the water was $14,500. Does this sound like a lucrative enterprise for a land owner?
Royalty=10¢
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