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Indefinite Moratorium Leads To Termination Of Leases In Northeastern Pennsylvania

Hess Corporation and Newfield Exploration Company recently terminated lease agreements with about 1,300 property owners in Wayne County, Pennsylvania, where the Delaware River Basin Commission (DRBC) has imposed a moratorium on gas drilling since May 2010.  The moratorium is not intended to be permanent, but only until the DRBC develops environmental regulations for drilling in the watershed.  The landowners received a combined $150 million (at $3,000 per acre) initially, and would have received an estimated $187 million in royalties had the wells been drilled.  The landowners are free to negotiate with other energy companies, but it is unclear whether any drillers would be interested given the moratorium.  Several weeks ago, the Northern Wayne Property Owners Alliance threatened to sue the DRBC “to regain [their] right to access [their] mineral estates.”