Make money from a gas well on your farm?

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News article

Make money from a gas well on your farm?

November 2011

rural consultancy news

There has been a lot of publicity recently about how shale gas reserves found recently under Blackpool are going to solve the UK’s energy requirements. With similar gas reserves throughout England, Wales and Scotland, a large number of farmers and landowners could soon be approached about having test wells drilled on their land.

The gas is extracted through a process called ‘fracking’ which involves pumping water, sand and chemicals underground at high pressure to shatter rock formations and so releases the gas. This has caused minor earthquakes in the Blackpool area so the project is currently on hold, but could still go ahead.
 
Mark Newton at Fisher German comments “It is very likely that farmers’ and landowners throughout the country will be approached by exploratory companies who want to test for shale gas. If gas is found, the landowner unfortunately will not be raking in millions a year and living the life of J R Ewing in Dallas.  What most do not realise is that gas, oil and coal are ‘hydrocarbons’ and belong to the Government who sell licences to the exploration companies, to drill for them.”
 
Mr. Newton has acted for several landowners in negotiating terms for drilling onshore gas and oil wells. “What farmers need to realise is that they are purely selling the right for an access and compound area for these drilling sites. These can still provide a large annual rental income but not as high as the royalty for minerals like sand and gravel which are not owned by the Government, but the landowner.
 
“It is normal practice that a reputable exploration company will pay, or make a contribution towards a landowner’s professional legal and surveyors’ costs for any exploration taking place on their land. It is imperative that landowners seek professional advice should they be approached by any companies wishing to evaluate fracking potential.”

For further information about fracking or shale gas, please contact Mark Newton at Fisher German on 01858 411246 or email mark.newton@fishergerman.co.uk 
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