James Bass says there are always two sides to a story, but when it comes to leasing land for the exploration for natural gas, it appears only one side is being told.

“The stories I’ve seen in the newspaper have been pretty disparaging against oil and gas companies coming here looking for natural gas,” said Bass, chairman and chief executive officer for Acadian Energy Resources Inc., a Texas-based company that has come to Fayette County to search for natural gas.

Higher fuel costs combined with new technology have re-ignited an interest in recovering natural gas that has been locked deep beneath the surface of the earth for millions of years.

Bass says there are mainly three different types of entities coming into or are already in West Virginia exploring for natural gas in the current Marcellus shale play.

“You have groups like the large public companies that are leasing huge amounts of acreage,” Bass explained. “Then you have small companies, like ours, that are small independent companies.”

Bass said his company is in Fayette County to lease and drill for natural gas.

“We are here to stay,” he said. “But others are strictly here to lease land in order to profit from it.”

Bass says after the geophysical and geological team members from the oil and gas companies determine the area to explore, landowners in that area will often contact a company like Acadian Energy Resources to negotiate a lease.

“The thing that is critical that they (landowners) know is that what we are doing is taking an oil and gas lease on their mineral rights. They are not selling us anything,” he said.

Bass says energy companies are following large land formations composed of Marcellus shale that run through West Virginia.

Bass said landowners should beware of those “just flipping acreage.”

“They are willing to pay just about anything because they know they can make a profit from it,” he said. “(They) take the leases back to Texas or some other oil and gas part of the country to sell the lease for a profit. That’s when you run into the slick landmen that will pressure you to lease your land and do as many unscrupulous things that they possibly can to get you to involve yourself with them.”

According to Bass, landmen, or drilling company agents, have been eager to lease the gas rights for properties and have been aggressively pushing landowners to sign on the dotted line.

But Bass warns landowners not to agree to the terms of the lease too quickly.

“The lease is a legal document,” said Bass. “Before you sign anything, understand everything.”

Bass said landowners must make good decisions when it comes to signing gas leases and should do as much research as possible.

“First thing I would ask is, ‘How many wells have you drilled in the past 10 years?’” Bass said. “Does he own a drilling rig? Does he have an operating company in this state that is registered and bonded? Has he put up his $50,000 to drill wells?”

Bass says those questions will let you know real quick what and with whom you are dealing.

“You’ll know if they are a legitimate oil and gas concern or a landman who is flipping acreage,” he said.

Bass said reports of land values in southern West Virginia of $2,000 an acre are inaccurate.

“In the northern part of Pennsylvania, where they have already proven the Marcellus shale is actually producing at huge rates, the infrastructure is already there and the pipeline is there, that’s where they are paying $2,000 an acre,” he said.

Bass said the northern part of West Virginia garners from $350 to $500 an acre.

“Those are areas, again, that are proven,” he said.

Bass said his company is paying more than landowners in this area have ever been offered before.

“We’re willing to negotiate and want the lease to be beneficial for both the landowner and the drilling company,” he said.

C.E. “Cotton” Walker, of Pence Springs, said he was sent an information packet from Acadian Energy Resources that contained all the company information, financial statements and history prior to meeting with company officials.

“They were not doing a door to door landman approach or any of the scare tactics mentioned by the media,” Walker said. “Acadian offered more money, and we signed a lease after reaching an agreement.”

From his experience, Bass has found that the biggest single thing that landowners can do when approached by the landmen is to hire an oil and gas attorney.

“You can hire one for a few hundred dollars,” he said. “We prefer to deal with an attorney, because they have a great understanding of oil and gas leases.”

Bass says those landowners with only a few acres should consider working together with other landowners in a block group.

Bass has found that if contiguous acres are included in a group, significant gains can be made in both the value of the lease and the terms of the lease.

“A small piece of land with one gas well just isn’t going to get it done,” he said.

The difficulty is that the issue is often about money which can be a very private matter.

“You don’t have anything to lose by putting your land together,” said Bass. “If you don’t talk to your neighbor, the landmen have all the information and you have none.”

The majority of the leases that are being negotiated today are for five-year terms. If the company decides to drill for natural gas during that time, all lease terms apply. At the end of the five-year term, the company can approach landowners to renew the lease, re-negotiate the lease, or, if the area has no pockets of natural gas, to allow the lease to expire. If natural gas is found, landowners in the production unit will receive a royalty or bonus payments.

Bass says that all experts agree that if a landowner is approached to lease mineral rights on their property, they must be sure to consider all factors before signing anything.

“I think, for the most part, when landowners bought their land, they didn’t buy it for the purpose of mineral rights that they own underneath,” he said. “They have come into a windfall situation and have the opportunity to benefit from something that they really didn’t buy the land for. At the same time, (landowners) need to understand what the lease is and what the opportunities are and that you should be dealing with reputable companies.”

Bass says success for the natural gas driller also means success for the landowner and the community.

“You’re going to have a larger tax base, people with income they never expected in the past, unemployment will go down and many good jobs will come with success,” he said.

— E-mail: fpace@register-herald.com