Title town in transit

Posted June 3, 2012

By Michael Bradwell
Observer-Reporter

For the past several years, Debbie Bardella has seen scores of representatives of companies researching land titles wait in line for hours to use the county computers.

The workers, known as title abstractors, research deeds of landowners to determine who owns a property's natural gas rights to enable gas drilling companies working in the Marcellus Shale to offer leases to holders of gas rights.

But Bardella, Washington County's recorder of deeds and head of tax assessment, said recently the overflow crowd of researchers she came to recognize over the years has gone from a gusher to a trickle, as many of the workers have been transferred to Ohio to perform similar tasks in that state's Utica Shale formation, which represents the next natural gas boom.

A couple of months ago, Bardella said, many of the abstractors began saying farewell to her.

"All of these people we saw on a daily basis said, 'You won't be seeing me anymore,'" Bardella said. She said many of the people told her they were being relocated to work on title research in Ohio.

According to Bardella, the title abstraction work for the natural gas drillers began here around 2006 and until a couple of months ago, she said, "tons" of people would stand in line for hours each day to use a roomful of computers in the courthouse to research titles.

"Now, that room is vacant," she said.

Utica rising

As of the end of April, natural gas companies had drilled about 60 Utica wells in Ohio, with the state approving permits to drill nearly another 200. Estimates are that more than 2,000 wells will be drilled in Ohio's Utica formation within the next three years, where industry leaders have estimated Ohio's portion of the "wet gas" shale formation may contain as many as 5.6 billion barrels of oil.

The projections underscore the push for drilling companies to write leases there and the move of some personnel by title abstracting companies from here to Ohio.

In addition to the oil yields it produces, the wet gas portion of shales also produce a variety of salable distillates that include propane, butane and ethane. Drilling companies have shifted their focus to wet gas production while waiting for the price of dry gas or methane, used for home heating and power plants, to recover from decade lows.

While the title abstracting companies continue to maintain a presence here - Holland Services signed a lease in April for 5,535 square feet in Millcraft Center - many of the companies must scramble to win new business from the drilling companies as they shift priorities and move to new areas.

In early March, Oil & Gas Title Abstracting, which has an office in Crossroads Center, laid off 60 employees here and in its Pittsburgh office due to lower natural gas prices and its clients' shifting business priorities.

When OGTA Chief Executive Officer Bob Butler confirmed the company's layoffs in March, he said abrupt shifts in customers' business plans are a fact of life in the title abstraction industry.

"Our business is client- and project-driven, and it's not uncommon" for the shifts in business priorities to occur, Butler said.

'Where the work is'

Jason Dunkle, a South Strabane Township resident who recently began working as a title abstractor in Ohio, is an example of the ebb and flow of work coming from the oil and gas industry.

After losing his job at OGTA's Washington office in the March layoffs, Dunkle attended a job fair in early March at the DoubleTree hotel in North Strabane Township. He said he was offered a job on the spot by an abstracting company that told him it would be in touch with him about a starting date.

When he didn't hear anything, Dunkle began calling the company, and eventually learned it wouldn't have any work for him until June.

Around the same time, he said he also received an offer from Holland Services to work on title abstracts at a West Virginia location about 80 miles away.

Dunkle said he didn't take the offer because he felt it was too far to travel each day.

But when a former co-worker in the industry pointed him to a job opportunity with Bridgeport, W.Va.-based Mason-Dixon Energy, with work as an abstractor in St. Clairsville, Ohio, Dunkle took the assignment as an independent contractor, noting that he has a daily 45-minute drive each way.

"I didn't really want to travel, but you've got to go where the work is," he said.

He said eastern Ohio is teeming with title abstractors like himself, researching land titles for oil and gas companies that include Exxon-Mobil, Chesapeake and Chevron that are preparing to tap the Utica Shale for wet gas. Consol Energy's CNX Gas unit recently drilled a successful Utica well in Mahoning County.

"In my thinking, in the next five years, this is where it's going to be," Dunkle said. "The St. Clairsville courthouse is crazy. You've got to get there before it opens to get yourself a spot."

Matt Pitzarella, spokesman for Range Resources, the largest holder of Marcellus Shale leases in the area, said last week that the company continues to lease properties in Washington County, but not at the rate or volume it has in the past.

"While we're always at various stages of leasing and development, at this stage we're focused on filing leases within existing units," Pitzarella said. "Rates are at comparable levels but there's not as many being signed. It's also a product of gas prices and the fact that hundreds of thousands of acres in this region have already been signed."

Pitzarella acknowledged that Ohio is experiencing a "land rush" for gas leases as companies prepare to drill in the Utica Shale strata there. Range currently has no projects in Ohio's Utica play, but did drill a test well in Utica Shale in Beaver County in 2009, according to Mike Mackin, another Range spokesman.

Despite the rush for leases in Ohio, Range is focused on the wet gas portion of the Marcellus that is primarily in Washington County. In the first quarter, the company said it brought 28 horizontal wells online in Southwestern Pennsylvania, all of which were located in the wet area of the play. At quarter-end, in Southwestern Pennsylvania, Range had 57 Marcellus Shale wells waiting on completion and another 43 wells waiting on pipeline.

Range also said it drilled its first Upper Devonian test well in the super-rich area of Southwestern Pennsylvania in the first quarter and was completing it. A second Upper Devonian test in the super-rich area was being drilled.

Tom Headlee, Greene County register and recorder of deeds, said the number of people who come in to do title searches at the Waynesburg courthouse hasn't slacked off.

"They move in and they move out," Headlee said. "Some leave but then we get new ones every day."

In regard to reports that gas companies are moving to areas where there is more wet gas, Headlee said, Greene County has wet gas in the Gilmore Township area, in the western part of the county.

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