Cabot offers Montrose non-surface lease

Montrose Borough was offered a non-surface oil and gas lease by Cabot Oil & Gas Corp. on two properties with a $1,000 per acre sign-on bonus and 15 percent royalty.
The lease proposal, discussed at the Monday, Jan. 9 council meeting, was offered by Bradley Boldt, a landman for the North Region, based out of Pittsburgh. Janice Lobdell attended the borough council meeting Monday and responded to questions regarding the proposed lease on a 1.4 acre parcel and a 9.36 acre property.
Drilling is scheduled for the spring, Lobdell said, and will add wells to the Greenwood pad, with five horizontal well bores which will be drilled beneath the borough properties. No drilling will be done on these land parcels, she told council.
Although sign-on bonuses recently offered by Cabot to other property owners were significantly higher, Lobdell noted that the offer is “down,” but added that “every lease is negotiable.”
Previously, Cabot was offering upwards of $3,500 per acre for the sign-on bonus and an 18.75 percent royalty, said borough solicitor Marion O’Malley.
“Mr. Boldt said that Cabot could take the gas whether we lease it or not,” O’Malley said.
“We can take still drill and utilize the area,” Lobdell said. “You can choose not to lease and to not receive royalties.”
Lobdell noted that the horizontal wells are bored at least 6,500 feet below the surface of the property.
Council member Craig Reimel asked about the Birchard well pad, located near a borough property. Lobdell said that Cabot has not commenced drilling and are just now finalizing access to the site on Meshoppen Creek Road.
Lobdell also said that homeowners within a reasonable distance of these well-bores cold also lease their property with “no access, no deductions” terms.
During the street department report, Ken DiPhillips reported that he needs salt for borough roads. Council approved ordering three loads, each of 20 tons of salt.
The borough is accepting Christmas trees, which can be dropped off in Memorial Park on Jackson St.
Council member Judy Kelly said that a grant has been received for a sidewalk project for South Main Street and that a PennDOT permit has been obtained. But the Pennsylvania American Water Company wants to put water lines in the same trajectory. “Obviously, we should wait a bit and work together,” Kelly said. She also noted that the time clock on the project starts when the bid for road construction is let, so the time factor is important. She said 15 percent of the funding will go to PennDOT for permitting fees.
A resident asked about the sidewalk ordinance, as she lives on Lake Avenue where there are no continuous sidewalks. She wanted to know if she really needs to have a sidewalk and whether there are unacceptable materials, the distance required from the street, and whether a step is necessary down to the road.
Council President Sean Granahan noted that Montrose Borough has not raised taxes in four years. The 2017 tax ordinance was adopted, remaining at 10 mills.
An executive session was held for personnel, and afterward it was reported that two probationary part time police officers, Joshua Diddick and Jessica Zaweski, were given a promotion, and that all borough employees were given a pay rate increase of 50 cents per hour.