From The Citizens’ Voice:
Anatomy of Noxen's BIG DEAL
By Patrick Sweet | Staff Writer
Published: July 18, 2010

 

This article can be viewed online at citizensvoice.com.

NOXEN TWP. - Harry Traver and Doug Brody glanced at each other, stood up and followed their neighbor's lead.

"We didn't drive all the way out here to make changes," neighbor Joel Field reacted when Carrizo Oil & Gas proposed amendments to the multi-million-dollar deal the three came to finalize.

Before the men made it very far, the company reeled them back to the bargaining table at its Pittsburgh office and hammered out a natural gas deal that includes the mineral rights to roughly 8,500 acres.

The three men, willing to walk away from a deal worth more than $4 million with the potential to become much more than $40 million, exemplify the roughly 135 families they represent.

They share the ideals of a community that came together and protested the closing of its post office on a bitter December morning. They embrace the camaraderie of a community that answered the call when its historic train station was threatened with demolition and raised funds to protect it.

So, when gas company landmen approached residents in rural Noxen Township, they demonstrated perhaps their greatest skill: their ability to unite.

"Ninety-five percent of the people that signed live here," Brody said. "I mean, this is our home ... It's been our group's home for years and generations in some cases. We took our time and I think we did it right."

A gas group is born

Residents gathered under the pavilion behind Noxen United Methodist Church to formulate their plan of action. Across the street from his Whistle Pig Pumpkin Patch, Field found himself responsible for preserving the hopes of his family, friends and neighbors for a lucrative gas lease. The Noxen Area Gas Group was born.

"I kind of stood up and said, 'Well, we ought to try this and we ought to try that,' and everybody said, 'OK. Great. Go do that,'" the 47-year-old farmer said. "ā?¦ The responsibility was awesome."

Over a 2½-year span, those responsibilities included innumerable hours of courthouse research, days studying the natural gas industry and negotiating deals that never succeeded.

He even traveled to Houston to market the land that their farms, orchards and businesses have rested on for generations.

"We didn't sign in the end, but for quite a long time we were dancing with Chief," Field said. "The only reason we danced with Chief Oil and Gas was because we did courthouse research that revealed they had a couple thousand acres right contiguous to our block."

Field didn't realize exactly what he was getting himself into that day. He never thought he would have to hunt down the estranged brother of a neighboring family to gain his signature on their lease.

"It actually took a couple months to find the brother in California," Field said. "They actually tracked him down through his union."

Just as much, Traver and Brody, the two men whom Field called upon to help organize the group, didn't think they would be studying geology or helping to cover a several thousand dollar attorney bill.

Two days after the group signed the lease on July 10, Field, Traver and Brody sat down with The Citizens' Voice for an exclusive interview about the experience. It was a complete about-face for the tight-lipped trio who refused to jeopardize any part of the deal before it was done.

Strength in numbers

Sitting at the wooden picnic table behind Field's house not far from the barn where the group held some of its meetings, the three men smiled, sharing stories of their community that was strong enough to stick together and financially benefit because of it - a nice check and thoughts of vacations probably didn't hurt as well.

Field, with large glasses and dirt beneath his fingernails from working in his fields, drummed on the table as he spoke about working with the group.

"Getting up to speed on (natural gas) and keeping the people together was always, I guess, our biggest concern," he said.

"But the people stayed together and that's what made it happen," Traver added.

"Some of our principles in the very beginning, when we first started out, was to stick together as a family, as a community," Field continued.

It's not difficult to imagine why the community would unite so well. The tiny farming community has struggled to strengthen its economy ever since Mosser Tanning Co. left town in 1961.

The tannery employed enough people to force the construction of a second hotel and a row of houses nearby. It brought unprecedented life to Noxen's economy that was once based on just more than a dozen farms and a handful of small businesses.

"When the tannery left, everything left with it," Noxen resident Pearl Race said. "This was a booming town at one time."

So, when a gas company comes and injects millions of dollars into a community that has seen half a century pass by since its industrial backbone collapsed, residents are more than excited.

"I think it's a wonderful thing," Race said. "It's got to help financially; much more taxes, much more money. .. We're going to finish paying our mortgage off."

Carrizo paid each lessor $500 per acre up front with an additional $4,500 and 20 percent royalty if the company finds a decent supply of gas.

On the day of the signing, Traver said, an elderly woman who was having trouble getting by stepped up to the table, leased her roughly 1-acre property and took her check. Traver's wife, Dawn, offered to take her to the bank.

The woman, Traver said, declined the offer.

"I want to keep it for a couple days just to look at it," she said.

The possibility of a check more than 10 times the amount they just received, it seems, has most folks embracing the words of former Alaskan Gov. Sarah Palin: "Drill, baby, drill."

And drill, they will

"We want production," Field said. "We're not just out there to get the bonus money. The value in this arrangement is in the royalty."

The problem is companies aren't quite sure the gas is there. Carrizo bought 2-D seismic data, senior landman Phillip Corey said, to get an idea of what they'd find.

"Based on what we see, it looks OK," Corey said. "You're trying to extrapolate a picture with three data points, though, when what you really need is a hundred."

The uncertainty is why Carrizo didn't pay the full $5,000 per acre up front. The company will drill two exploratory wells to test the area's potential before cutting any more checks.

The Noxen group is split into southern and northern areas. Carrizo will drill one well in each area. If gas production is strong in the north but not the south, Carrizo will only have to pay northern landowners and vice versa.

Wooden stakes with neon flags tied to the tops mark the location of the northern well in Field's pumpkin patch. The Sordoni family's massive Sterling Farms property will play host to the southern well.

The Sordoni property is one of a few properties directly abutting Harveys Lake. A provision in the lease prevents Carrizo from drilling within 500 feet of any structure or water source.

Still, some folks are concerned with what might unfold.

Undrinkable water?

Noxen resident Viola Robbins, 72, has family in Dimock Township, the poster-child community for environmental disasters caused by natural gas drilling. Thousands of gallons of potentially carcinogenic drilling fluid spilled just outside the town.

"They can't do nothing," Robbins said. "(The gas company) brought them water for drinking and cooking."

Toxic water forced Robbins' great-niece Andrea Ely and her family to move back in with her parents.

"I'm against it," Robbins said. "Maybe it's me. It might be a different story if I had lots of land for them to drill on."

Still, many others have faith that Carrizo won't make the same mistakes as Cabbot Oil and Gas did in Dimock Township.

"We all own farms down through here," Traver said. "When these people say that they are worried about the water, they aren't as worried as these guys, because that's how they make their living."

psweet@citizensvoice.com, 570-821-2117
 

 

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