A sobering gas lease tale for Tusten landowners
By Dan Hust
NARROWSBURG — Patrick and Susan Fennessey’s 104 acres sit not far from the Millennium Pipeline east of Narrowsburg.
The “Camp,” as they call it, has been a cherished family retreat for six years, a way for Patrick, an IT director, and Susan, an attorney, and their young children to escape the high-energy world of New York City.
The quiet mix of forested and open land features a wetlands area of Beaver Brook and stone walls built a hundred years ago – and up until recently, nary a neighbor.
So why did the Fennesseys approach Cabot Oil and Gas Corp. to lease their land for gas drilling?
For one, because their neighbors may be planning to.
“It’s not going to make a difference if I drill,” Pat explained, referring to the noise and dust that are part of every monthlong drilling effort.
Two hunting clubs – each with more than 1,000 acres – border his land, while 10,000 acres of the Boy Scouts’ Ten Mile River reservation surround the rest.
Though leases have yet to be filed in the county clerk’s office, Pat has heard they’re interested, if not negotiating.
But the Fennesseys themselves weighed the pros and cons and felt their property would not be destroyed by the presence of a gas well or wells.
So they got in touch with a Cabot landman, hired an Orange County attorney with experience in the gas industry, and started negotiating.
Cabot’s offer was for $1,500 an acre upfront with a 12.5 percent royalty on subsequent profits.
The Fennesseys were working with their lawyer on some addenda to the lease that included having Cabot test the family’s water supply before, during and after drilling, requiring Cabot to guard against unnecessary damage to land and crops, and ensuring cooperation in the siting of roads, gates and fences.
Then Cabot abruptly stopped negotiations.
Two weeks ago, Patrick got a call from his attorney, saying the company was withdrawing all its offers in the Catskills region due to market conditions.
“I knew that the market was getting bad,” said Pat, who was more disappointed than surprised by the move.
Though others have been negotiating leases for close to $3,000 an acre, Pat was happy with Cabot’s offer, and now he fears even that amount won’t return in the near future.
“I think it’s a missed chance,” he remarked. “My gut feeling is they have hit enough gas supply for the demand.”
Cabot did not return a call for comment. But the combination of dropping prices and dropping demand amidst the financial markets’ turmoil is having a major impact on the large gas drillers, and Pat is not as certain as others that the leasing activity will rebound in Sullivan County, long cursed with large-scale failed dreams of wealth.
“This poor county gets beat up a lot,” he said.
“I feel disappointed more for other people,” he added. “... It’s not life or death for us.”
Indeed, the Fennesseys’ slice of paradise is not up for sale, regardless of whether or not gas drilling arrives. They simply can’t imagine leaving.
“It’s just such a wonderful area,” said Pat.
