The Independent Oil & Gas Association of NY Commends NYS Commission on State Asset Maximization Report

LAKE VIEW, NY (06/23/2009)(readMedia)-- The Independent Oil & Gas Association of New York (IOGA of NY) commended a recent report by the New York State Commission on State Asset Maximization's (SAM) for recognizing the economic potential of expanded natural gas exploration in New York.

According to the report, the Marcellus Shale - a geologic formation extending into New York with potentially large reserves of natural gas - presents an opportunity for the state to unlock tremendous value, and likewise presents an unprecedented opportunity for economic development. Depending on the geology, a typical horizontal well in the Marcellus Shale - covering approximately 80 acres - may produce 1.0 to 1.5 bcf (billion cubic feet) of gas cumulatively over the first five years in service. At a natural gas price of $6 per mcf, this will result in typical royalty income to a landowner of between $750,000 and $1 million over a five-year period.

The enormous benefits of Marcellus Shale development also include job creation, increases in state and municipal revenues from the existing real property tax structure and, of course, royalties paid directly to landowners. Furthermore, development of state-owned lands could provide much needed revenue relief to the state and spur economic development in economically depressed regions. Likewise, exploration could result in lower energy costs for all New Yorkers. The SAM Commission report recommends consideration of "the potential for new private investment in extracting natural gas in the Marcellus Shale on state-owned lands, in addition to development on private lands."

"Over the past year, we have witnessed the financial meltdown that has gripped New York, and wreaked havoc on the global marketplace," said Brad Gill, executive director of IOGA of NY. "With advances in technology, it is possible to build new markets for New York-produced, clean-burning natural gas without compromising our natural resources. Natural gas exploration has been conducted safely for decades in New York. I'm pleased to see that the commission understands the incredible potential here. This is truly an opportunity of a lifetime."

The commission anticipates that this report will position the state to take advantage of various opportunities, such as Marcellus Shale development, and provide an approach for long-term, strategic investment in state assets. Governor Paterson created the New York State Commission on State Asset Maximization by Executive Order last October.

"At a time of financial hardship, we have the chance to provide an energy resource not only for our state, but nationwide. This is something New York can not afford to miss out on," Gill said.

***

IOGA of NY is a trade association founded in 1980 to protect, foster and advance the common interests of oil and gas producers, professionals and related industries in the State of New York. IOGA of NY takes great pride in its commitment to members and their local communities.

-30-

Posted Tuesday June 23, 2009 at 10:48 am by Independent Oil and Gas Association of New York