Gas leasing slowing, though new leases still show up

By Dan Hust
MONTICELLO — More gas drilling leases have been filed with the Sullivan County Clerk’s Office, though in this area, nary a single well drilling permit has been requested of the state.
That may be because Chesapeake, Cabot, XTO and Range Resources – all interested in this area of the gas-rich Marcellus Shale – are taking more cautious approaches to what formerly was a rampant lease acquisition.
According to reports in the Wall Street Journal and other media outlets, gas companies are being hard hit by the troubles in the global financial markets. In fact, Chesapeake CEO Aubrey McClendon disclosed Friday that he had to sell “substantially” all his 33.5 million shares in the company to meet margin loan calls, while XTO CEO Bob Simpson sold 2.8 million of his 9.6 million shares in XTO to satisfy “all considerations for debt, personal interests and family liquidity,” said the company’s Website.
The general consensus of experts and observers in these reports is that the largest players in the gas industry have been so aggressive in seeking out leases that Wall Street’s meltdown has left them unable to continue leasing, and drilling may be postponed as well.
With cash short, credit tight and demand down, the industry is having to reassess its activities in the area. Already, locals report that both Cabot and Chesapeake have toned down or even stopped their lease acquisitions, as their Wall Street fortunes decline by double-digit percentages.
However, leases continue to be recorded in Sullivan County, and a new township – Thompson – has been added to the ranks of communities with active leasing. Acreage amounts in other townships have also included several tiny properties, mostly in proximity to the under-construction Millennium Pipeline.
The following list is based on data publicly available at the clerk’s office inside the Government Center in Monticello. It is arranged by the date the lease was executed.
• June 16: Rebecca Harmon of Long Eddy signed a seven-year lease with Chesapeake for 3 acres in the Town of Fremont.
• June 18: Richard Hofer of Narrowsburg signed a seven-year lease with Chesapeake for 105 acres in the Town of Cochecton.
• June 21: Lester and Margaret Hillriegel of Callicoon signed an eight-year lease with Chesapeake for 3 acres in the Town of Fremont.
• June 21: John and Wendy Schenck of Callicoon signed a seven-year lease with Chesapeake for 58 acres in the Town of Delaware.
• June 22: The Henke Family Trust of Callicoon agreed to an eight-year lease with Chesapeake for 123 acres in the Town of Delaware.
• June 22: Michael and Shannon Henke of Callicoon signed an eight-year lease with Chesapeake for 179 acres in the Town of Delaware.
• June 22: John and Heather Ferber of Callicoon signed a seven-year lease with Chesapeake for 29 acres in the Town of Delaware.
• June 29: Maria Milucky of Long Eddy signed two eight-year leases with Chesapeake, one for 15 acres and another for 30 acres, all in the Town of Fremont.
• June 29: Elizabeth and John Catani of Whitehouse Station, New Jersey, signed an eight-year lease with Chesapeake for 58 acres in the Town of Fremont.
• June 29: Harland Will Wood of Middletown signed an eight-year lease with Chesapeake for 156 acres in the Town of Fremont.
• July 3: Jeff Klansky of Atlantic Beach signed a five-year lease with Cabot for 66 acres in the Town of Tusten.
• August 5: Manuel Hirschman of Monticello signed a five-year lease with Cabot for 10 acres in the Town of Thompson.
• August 13: Fred Daub Jr. of Narrowsburg signed a seven-year lease with Chesapeake for 2 acres in the Town of Cochecton.
• August 13: Jeff and Sandra Daub of Narrowsburg signed a seven-year lease with Chesapeake for 112 acres in the Town of Cochecton.
• August 19: Debra Barnes of Narrowsburg signed a five-year lease with Cabot for 3 acres in the Town of Tusten.