Tuesday, March 11, 2014
By KEVIN BEGOS/The Associated Press
(Continued from page 1)
Shawn Georgetti climbs out of his John Deere tractor on his 167-acre family dairy farm in Avella, Pa., on Saturday. With royalties from a Range Resources gas well on his property, Georgetti has been able to buy newer farm equipment that's bigger, faster and more fuel-efficient.
The Associated Press
STATES WITH THE MOST
GAS DRILLING ROYALTIES
Estimates of gas drilling royalties paid to private landowners in 2010, according to the National Association of Royalty Owners, ranked in order of the top several states. Royalty payments change yearly based on well production, wholesale prices and individual landowner contracts. Estimates are based on federal production data and assume a royalty of 18.75 percent.
• Texas, $6.7 billion
• Wyoming, $2 billion
• Alaska, $1.9 billion
• Louisiana, $1.75 billion
• Oklahoma, $1.6 billion
• New Mexico, $1.3 billion
• Colorado, $1.2 billion
• Arkansas, $668 million
• Pennsylvania, $500 million
• Utah, $347 million
• West Virginia, $216 million
• Ohio, $68 million
• New York, $31 million
NATIONAL TOTAL: $21.2 billion
– The Associated Press
Pennsylvania's total gross domestic product in 2011 was about $500 billion, according to the U.S. Department of Commerce.
Inman noted that total gas industry hiring and investment can have a far bigger effect on a state or region, and companies have invested tens of billions of dollars just in Pennsylvania on pipelines, infrastructure, and drilling in recent years.
For example, in North Dakota, the shale oil and minerals boom contributed 2.8 percent of GDP growth to the entire state economy in 2011, according to Commerce Department data.
Another variable in how much royalty owners actually receive is the wholesale price of gas. That has dropped significantly over the past two years even as production has boomed in Pennsylvania and many other states. Average wholesale prices went from about $4.50 per unit of gas in 2010 to about $3 in 2012. For many leaseholders, that meant a decline in royalties.
The boom in natural gas royalties has even led to niche spinoff companies that look for lease heirs who don't even know they're owed money.
Michael Zwick is president of Assets International, a Michigan company that searches for missing heirs.
"It was an underserved niche," Zwick said of oil and gas leases. When a company can't find an heir to lease royalties, the money often goes to state unclaimed property funds.
Zwick said he has found a few dozen people whose gas lease money was being held in escrow, including one who was owed about $250,000 in drilling royalties. But the average amount, he said, is far lower.