Kokomo Tribune; Kokomo, Indiana

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March 31, 2014

Neighbors bicker in Pa. over forced gas drilling

NEW BEDFORD, Pa. (AP) — An energy company is dusting off an old, unused state law that can force property owners to accept oil and gas drilling under their land, pitting neighbor against neighbor in a Pennsylvania community and raising the possibility that lawmakers will have to take sides.

Houston-based Hilcorp seeks to use a 1961 Pennsylvania law to drill under the property of four holdout landowners in New Bedford, near the Ohio border an hour north of Pittsburgh. The concept, known as "forced pooling," means that people who don't sign leases get bundled in with those who do, to make drilling more efficient and compensate all the landowners.

The stakes are high. Property owners can reap royalties totaling hundreds of thousands or even millions of dollars from drilling in the Utica Shale formation, which lies below the better-known Marcellus Shale.

Suzanne Matteo, one of the four who has refused to sign a lease, said she is furious that the company may be able to drill under her property without her permission.

"It's un-American," she said.

On the other side are many neighbors who have signed leases, such as Bruce Clingan, who owns the roughly 200-acre Tanglewood Golf Course with his wife, Jody. They signed a lease with Hilcorp a few years ago and received a signing bonus of more than $500,000, plus 18 percent royalties on future production.

"I don't understand how people that own 4 acres of ground can hold up such a big thing. I don't agree with that," Clingan said.

Hilcorp said that 99 percent of the property owners in the 3,267-acre tract have signed leases, and that drilling would occur a mile or more under the surface of the holdout's property. Invoking the old law, the company said, would ensure that "all participants, leased or unleased, are compensated for the minerals they own."

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