Newfield Exploration Says Low Natural Gas Prices Led to Wayne County Lease Terminations

July 16, 2013 | 5:35 PM

Susan Phillips / StateImpact Pennsylvania

The Delaware River at Milford, Pike County. Although Wayne and Pike counties lie on top of Marcellus Shale natural gas deposits, natural gas has not been developed in the Basin.

For the past several weeks, Wayne County property owners who have leased their mineral rights for gas drilling have gotten some unwelcome letters. Hess Corporation and Newfield Appalachia have terminated leases negotiated almost four years ago, in August 2009.
Keith Schmidt, a spokesman for Newfield Exploration, says low natural gas prices led to the decision.
“The primary decision not to continue development was a business decision based on low natural gas prices,” said Schmidt. “And then to redirect our efforts in energy toward proven oil reserves in other areas of the country.”
But members of the Northern Wayne Property Owners Alliance, a group that spent time and money negotiating a lease they say is a model of environmental stewardship, say the lack of regulatory certainty with the Delaware River Basin Commission played a large role in both Newfield and Hess terminating the leases.
“We feel that they have gone beyond their mandate,” said the NWPOA spokesman Peter Wynne. “They have no business focusing on gas drilling alone when there are many many other industries that have ongoing impacts on the Delaware River. If they cared about the health of the river they would ban kayaking and canoeing and fishing in the river with hip waiters because these are spreading the invasive plant called rock snot. This is nonsense.”
Wynne says his group will be pursuing a lawsuit against the DRBC to force it to enact gas drilling rules, or step aside. The DRBC decided not to permit drilling in the Delaware watershed until the agency drew up and voted on its own regulations. A vote scheduled for the proposed rules in November 2011 was abruptly cancelled after it became clear the Commissioners did not agree.
At a meeting last week the DRBC Chair Michele Siekerka, who represents New Jersey Gov. Chris Christie, detailed how the DRBC staff had spent hours reviewing best practices and new research on gas drilling, as well as doing baseline sampling of water in the basin.