Release #017-11

Feb. 1, 2011



The following news release contains six articles related to Board action on Bureau of Wildlife Habitat Management items:



1) BOARD APPROVES ITEMS IN LEHIGH, CENTRE AND BLAIR COUNTIES

2) BOARD APPROVES PURCHASE OF COAL RIGHTS TO PROTECT SGL 330

3) BOARD APPROVES GAS LEASE ON SGL 208

4) BOARD APPROVES SURFACE MINING COAL LEASE ON SGL 100

5) BOARD APPROVES GAS LEASE ON SGL 276

6) BOARD APPROVES SURFACE MINING COAL LEASE ON SGL 75





BOARD APPROVES ITEMS IN LEHIGH, CENTRE AND BLAIR COUNTIES

HARRISBURG – The Pennsylvania Board of Game Commissioners today approved a donation of land in Lehigh County, and two acquisitions of land in Centre and Blair counties.


The Board approved accepting a donation from Leroy L. and Lola M. Spangler, of three-tenths of an acre in Heidelberg Township, Lehigh County, adjoining State Game Land 217. The tract reduces an indenture into SGL 217, and provides road frontage on Reservoir Road. The property is forested with mixed oak and has mountain laurel growing in its understory.


The Board approved the purchase of 114.7 acres in Howard Township, Centre County, adjoining SGL 323, from Howard L. Mantle for $395,000, which will be paid with funds from the land exchange with Pennsylvania State University on SGL 176. The purchase is subject to the approval of the United States Fish and Wildlife Service. Both tracts are forested and adjoin U.S. Army Corps of Engineers Foster Joseph Sayers Dam property to the south. Right-of-way access is provided from Old Route 220/Township Route 663.


The Board also approved the purchase of mineral rights under two portions of SGL 198, Allegheny Township, Blair County, from Christian W. Anslinger for $2,500 lump sum. The first tract is 295.55 acres, the other is 129.05 acres. Acquiring these mineral rights will provide more control of the surface on this portion of SGL 198.





BOARD APPROVES PURCHASE OF COAL RIGHTS TO PROTECT SGL 330

On Sept. 20, Pennsylvania Game Commission staff, utilizing recent approved authority granted by the Board of Game Commissioners in April, was the successful bidder at a tax sale held at the Clarion County Courthouse for the coal rights on two tracts adjacent to State Game Land 330, in Piney Township, Clarion County.


Based on its successfully bidding, the Game Commission acquired the rights to 50.8 acres of coal for $2,154.14 under a parcel that is an interior on SGL 330. The agency also acquired the rights to 15 acres of coal for $597.40 under a tract of land that adjoins SGL 330.


In April, the Board of Game Commissioners approved a regulatory change to delegate certain powers to the agency’s executive director to enable Game Commission staff to act expeditiously to acquire lands, waters and oil, gas and minerals rights. Successful bids must be made known to the general public at the next regularly scheduled meeting of the Board of Commissioners. These two acquisitions were announced at today’s meeting, because the transactions were not finalized in time for the Board meeting held on Oct. 5.


“Tax sales or auctions often are announced between regular Board of Game Commissioner meetings and are held sooner than is practicable to hold a special meeting or notational vote,” said Carl G. Roe, Game Commission executive director. “This new authority gives staff the flexibility it needs to bid on real estate, oil, gas or mineral rights at auction, or tax sales, so we can better protect our State Game Lands system and the investment made in these lands by hunters and trappers.


“The recent actions announced today are a product of that authority, and will go a great distance in enabling the agency to better manage this portion of SGL 330. And, based on the specifics of the two purchases, are proof-positive that the Game Commission staff is capable of acting in the best interests of the state’s wildlife resources and habitat.”


Under the regulatory change approved last year, the executive director must notify the Board of Commissioners of the pending auction sale date and verify that, due to unforeseen time constraints, it is necessary to be able to react immediately. The purchase price at auction may not exceed $500,000 without additional approval from a majority of the Board of Game Commissioners.





BOARD APPROVES GAS LEASE ON SGL 208

The Pennsylvania Board of Game Commissioners today approved a non-surface use oil and gas agreement with Ultra Resources Inc. of Englewood, Colorado, to the oil and gas owned by the agency under 2,523.8 acres of State Game Land 208, south of Route 6 in Gaines Township, Tioga County.


The terms of the five-year, non-surface use oil and gas agreement include an initial bonus payment of $3,785,700, as well as additional bonus rental and royalties, which will be deposited into the Game Fund. Oil and gas development will be regulated by the Commonwealth’s oil/gas regulations and the Game Commission’s standard non-surface use oil/gas production agreement.


Bonus/rental and royalty consideration for the lease was based on actual documented production and lease development. The overall non-surface use acreage value ranges from $1,500 to $2,000 per acre accumulated value and 16.5 percent to 18 percent total accumulated royalty value.


Ultra Resources has already initiated a well drilling/development program on privately-owned grounds adjacent to SGL 208, and has the ability to unitize the Game Commission’s oil/gas ownership by directional drilling without disturbing the SGL surface and is able to develop the agency’s oil/gas reserve through their existing infrastructure.


“This lease arrangement will ultimately benefit both those adjacent private landowners, who have already leased their lands to Ultra Resources, while also providing maximum value to the Game Commission to assure the ongoing protection to all wildlife resources and sportsmen who use these State Game Lands,” said Bill Capouillez, Game Commission Bureau of Wildlife Habitat Management director.


Game Commission staff negotiated with Ultra Resources in an effort to ensure prudent development of the agency’s oil/gas reserve and simultaneously protect the wildlife resources and recreational use of this portion of SGL 208.





BOARD APPROVES AMENDMENT TO SURFACE MINING LEASE ON SGL 100

The Pennsylvania Board of Game Commissioners today approved a surface mining coal lease amendment to the existing coal mining lease with Warren C. Hartman Contracting Inc., of Clearfield, which entails 111 acres of State Game Land 100.


Under the amendment, the Game Commission will allow Hartman Contracting to remove, process, and sell incidental sandstone uncovered through the current coal mining and reclamation operations from 51.5 acres of mining. No additional acreage will be added to the existing lease under this proposal.


The Game Commission is considered to be the owner of the coal, stone and surface mining rights on this tract of land. The Board previously approved the existing coal mining lease at its meeting in October of 2005.


In exchange for the lease amendment, Hartman Contracting will pay the Game Commission, on a monthly basis, a stone royalty rate of 10 percent of the then current F.O.B. pit price or 25 cents per ton, whichever the greater, for each marketable ton of stone sold from the lease area.


Additionally, Hartman Contracting will undertake wildlife habitat enhancement projects, not limited to, creating both summer roost bat habitat and timber rattlesnake habitat during reclamation of the site. Such projects will be developed in consultation with the Game Commission’s Harrisburg and Northcentral Region Office staff.


Estimated stone royalty value of the proposed mining has been estimated to be $40,000 and will be deposited into the Game Fund. All other terms and conditions of the current lease will remain unchanged.


All proposed mining areas have already been reviewed and approved in accordance with the state Department of Environmental Protection’s surface mining regulations.


In other action, the Board, on Monday, recognized Chris Hartman, owner of Hartman Coal Company, for previous mining activities that removed 5,000 linear feet of highwall and reclaimed an additional 111 acres of abandoned mine lands on State Game Land 100. Hartman had been named the 2010 Interstate Mining Compact Commission’s Small Operator of the Year for this project.





BOARD APPROVES GAS LEASE ON SGL 276

The Pennsylvania Board of Game Commissioners today approved a shallow oil/gas production agreement on a 103.04-acre tract of State Game Land 276, Indiana County.


The previous oil and gas owner, Penn View Exploration, had drilled four producing shallow gas wells on this tract in 1984. This agreement will enable Penn View Exploration to continue to operate the four existing wells, and to drill up to two additional shallow vertical wells. The agreement also limits the depth of the wells to the base of the Elk Group sands and does not allow for any Marcellus Shale development.


Penn View Exploration will pay the Game Commission a 12.5 percent royalty of the wellhead price per MCF of gas produced and sold from the four existing wells, and 15.625 percent royalty of the wellhead price for all oil and gas produced and sold from any new wells. Penn View Exploration also will pay a rental fee of $100 per acre and provide the agency with 300,000 cubic feet of free gas per year with a non-use payback clause.


Further, Penn View Exploration has agreed to adhere to the reclamation and revegetation requirements as specified by the Game Commission’s Land Management Group Supervisor on a 300-acre, privately held lease holding on SGL 276.


“This is a perfect example of how the Game Commission and an environmentally-conscientious oil and gas production company, such as Penn View Exploration, can reach a mutually-beneficial arrangement allowing for the development of privately owned oil/gas rights from beneath the State Game Lands, while promoting the proper wildlife habitat management of the overall SGL surface,” said Bill Capouillez, Game Commission Bureau of Wildlife Habitat Management director.


All royalties and rental fees shall be deposited into the Game Fund. Oil and gas development will be regulated by the Commonwealth’s oil/gas regulations and the Game Commission’s standard oil/gas production agreement and $25,000 performance bond. The agreement includes the agency’s standard wildlife and protection measures and further limits well development to a total of two new shallow vertical wells.





BOARD APPROVES SURFACE MINING COAL LEASE ON SGL 75

The Pennsylvania Board of Game Commissioners today approved a surface-use agreement involving State Game Land 75, Lycoming County. Under the agreement, Glenn O. Hawbaker Inc., of Bellefonte, will process and sell excess sandstone from the Fisher Mining operation of State Game Land 75. The estimated volume of excess sandstone from the Fisher Mining operations is more than one million cubic yards. The sandstone storage and process area will occur within the Fisher Mine Lease area, and will utilize about 25 acres and the existing haul road.


The Game Commission is considered to be the owner of the coal, stone, and surface mining rights on this tract of land. The agency’s surface use agreement is contingent on a private written agreement between Hawbaker and Fisher Mining, given that the actual mining of the stone is incidental to Fisher Mining’s current operations.


The six-year surface-use agreement provides the Game Commission with an option to extend the agreement for no more than three additional years. Hawbaker will be responsible for reclamation of its operations and the haul road upon the termination of the agreement.


In exchange for the surface-use agreement, Hawbaker will pay the Game Commission, on a monthly basis, a surface-use rate of seven percent of the then current F.O.B. pit price or 45 cents per ton, whichever the greater, for each ton of sandstone sold within the first three years of operations. After three years, a surface use rate of seven percent of the then current F.O.B. pit price or 50 cents per ton, whichever the greater, for sandstone sold within the remaining years of operations.


Additionally, Hawbaker has agreed to complete, at the discretion of the Game Commission’s local Land Management Group Supervisor, road infrastructure improvement projects throughout the SGL system to improve public access. The value of each approved surface improvement project(s) will be credited against the value of the surface use rate for the stone and must be completed within two years from the date of execution of the agreement. Two potential road improvement projects are on SGL 252 and SGL 176.


The total accumulated surface-use value of this agreement has been estimated to be worth $750,000. Upon the completion of the road improvement projects, all remaining revenues generated from the stone processing and surface use of the SGLs will be deposited into an interest-bearing escrow account to be used for the future purchase of lands, or to be directly deposited into the Game Fund.



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