Southwestern Energy Company (NYSE:SWN) has recently acquired a new 400-acre mineral lease in Moffat County. As per the deal signed with the Board of Commissioners, the county would receive $80,000 immediately for the lease, with an added share of 18.75% of the profits. Furthermore, the company has also been making similar efforts in Brooke County. However, things in Brooke County have just started to move forward, with an expression of interest by the County commissioner.
Jeff Comstock, the director of Department of Natural Resources in Moffat County, expressed his views that the deal has been severely underpriced. He stated that if the lease had been issued during 2010, the county would have received a bonus payment of $2,500 per acre, instead of the current $200 per acre. He pointed out the fact that the majority of leases in the county are usually left undeveloped; hence the royalty rates were the actual money makers for the region.
However, Mr. Comstock has also overlooked the different ways in which SWN has been engaging itself with the community. Most recently, the company held its “Week of Giving” event, where the employees served food to the locals. The VP of government and community relations, Danny Ferguson, stated that his company’s engagement with the community is not a once in a year thing. However, things in Brooke County have yet to kick off. Until now, the county commissioner, Jim Andreozzi, has only expressed an interest of involving oil & gas companies to develop the assets in his county. Southwestern Energy is yet to make an investment in the region. However, it did accept the invitation of the commissioner to a luncheon at his courthouse to kick start communications. Currently, SWN owns two natural gas rigs in the county, which were acquired as per the acquisition of assets from Chesapeake.
Southwestern Energy Company (NYSE:SWN) closed at the end of the September 18 session at a share price of $14.48, after experiencing a trade volume of 0.00 and registering a decline of 6% in its share value.
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