What We Do

click to enlarge detailsOur country is in dire need of a cheap, domestically produced, clean burning and abundant fuel. The key to our energy independence lies right below your very feet, here in Western Pennsylvania. Trapped in sand formations and shale layers, thousands of feet below the surface lays enough natural gas to supply the entire country for many years to come.

While natural gas drilling is no new concept to the region, a new formation or "play" as it is referred to in the industry, called the Marcellus Shale is making headlines. Located about a mile below the earth’s surface is a thick, organic-rich layer of shale. Although the layer has been known about for many years, only recently has the technology to drill into it and successfully capture the gas come available. Geologists estimate that the formation contains approximately 500 Trillion cubic feet of gas, with a value of 10 trillion dollars. This means jobs, infrastructure, prosperity and wealth will be coming to our region in a manner that we have never before witnessed.

In order to gain access to the natural gas underlying private and public properties, natural gas production companies such as MDS Energy, may enter into a "Gas Lease", also known as an Oil & Gas Agreement with the property owner. The agreement grants the production company the exclusive right to come onto the property and carry out operations to extract natural gas from the land. This may include building temporary or permanent roads, laying pipelines to transport the gas to a transmission pipeline, and the drilling of the well itself. As compensation for the ability to carry out these operations, the landowner receives a 12.5% royalty check for all of the oil and gas that comes out of wells on their property, as well as enough free gas to heat their home.

The price of gas is determined by the New York Mercantile Exchange (NYMEX). The NYMEX is where all commodities are traded, much like stocks on Wall Street. Similar to the price of oil, the price of natural gas has fluctuated greatly over the past 18 to 24 months. As of early 2009, gas has been trading at a moderate price range of between $5 and $7 per 1,000 cubic feet of gas. In the summer of 2008 however, gas was trading well above $10. As the price of gas goes up, so does your royalty check. For a shallow gas well, landowners in our area can expect an average monthly royalty check at current prices to be between $500 and $2,000 per month, per well, depending on the quality of the well. For a Marcellus well, the royalty would be much higher, as much as $5,000 to $10,000 per month at current prices. As you can see, this is a very lucrative proposition for most landowners.

Average Royalty @ $5.00 gas (monthly)
Shallow Well: $500-$2,000
Marcellus Well: $5,000-$10,000

Average Royalty @
$10 gas (monthly)

Shallow Well: $1,000-$4,000
Marcellus Well: $10,000-$20,000

Before & After

Natural gas drilling is simple, safe, environmentally friendly, and leaves a very small amount of your property disturbed. During the drilling process, MDS Energy typically clears an area approximately 125'x 125'. This is called the "pad" or "location". This is where the drill rig will sit for the 3 to 4 days that it takes to drill the well. The topsoil is separated and placed to the side to be spread back over and reseeded and mulched once all operations are finished. We leave every well site in the condition that we found it in, many times considerably better.

The permanent footprint of a well will be no more than 25'x 25', many times considerably smaller than that. If your well produces gas without the need to fracture the underground formations with water, the well will consist of nothing more than several small pipes coming out of the ground with a small hutch to contain the meter. Should we need to fracture the formations, the water that is forced into the formations needs to be removed to allow the gas to escape out of the well. To achieve this, we use what is called a pump-jack. Previously used in oil fields to recover crude oil, pump jacks on natural gas wells have greatly increased the production of fractured wells. While somewhat unsightly if placed in a residential environment, they are safe, and most of the time silent. We only run our pump jacks for a few hours at a time, usually only once per week or month, and when running they are no louder than a lawnmower. Also, we can always put up privacy fences or decorative landscaping to help hide or integrate the well into your residential property.