The Rule of Capture, or Law of Capture, does apply to the Marcellus Shale and Utica Shale formations in Pennsylvania.
The “Rule of Capture” relating to natural gas provides that the first person to “capture” or extract natural gas from a wellbore beneath the surface of their property acquires ownership and title to that natural gas, regardless of whether the extracted gas originated from neighboring lands not owned by the Landowner. The Rule of Capture generally permits a Landowner to drain or “capture” oil and natural gas from a neighboring property owner without liability. However, under Pennsylvania law it is a trespass for a Landowner to drill a well from the surface of their property that penetrates beneath the surface of a neighbouring property without authority.
Although the Rule of Capture does apply, its impact is far too often misrepresented by landmen and misunderstood by Pennsylvania landowners. Landmen have used Landowner confusion regarding the Rule of Capture to persuade or scare Landowners to sign oil and gas leases out of fear that their oil or gas will be “stolen” or “taken” by their neighbor if they do not sign a gas lease. Many Landmen have purposely overstated the impact of the Rule of Capture as another tool in their arsenal to persuade Landowners to sign oil and gas leases.
Landowners should generally not sign oil and gas leases out of fear that their Marcellus Shale or Utica Shale gas will be “stolen” by their neighbor if they do not sign a gas lease.
The majority of natural gas extracted from horizontal directional drilling and hydraulic fracturing (fracking) techniques is limited to a few hundred feet from the wellbore. Thus, the natural gas tightly trapped in the Marcellus Shale or Utica Shale formation under your property generally will not significantly migrate and escape to a neighbor’s well. Although some natural gas may migrate as a result of nearby drilling and fracking, the Rule of Capture is typically only a minor concern, if any, for shale gas extraction in Pennsylvania. Do not be tricked or intimidated into signing an oil and gas lease under the mistaken belief or misinformation that your Marcellus Shale or Utica Shale gas will escape en masse to the property of another. Remember, natural gas companies do NOT have the legal right to horizontally drill under your property if you have not entered into an oil and gas lease.
If you are currently presented with an oil and gas lease offer, get the facts from someone you can trust. Contact the Clark law Firm, PC. Attorney Doug Clark is Pennsylvania’s landowner lawyer and he can help you. Contact us today!