2009-09-24-2009-09-18

To purchase up to 35,000 acres in Marcellus shale in PA, NY.

Fortuna Energy Inc., Horseheads, N.Y., a subsidiary of Talisman Energy Inc., Calgary, (NYSE: TLM) has signed an agreement with a coalition of more than 600 landowners in Pennsylvania and New York known as The Friendsville Group to acquire some 35,000 acres in the Marcellus shale for a value of up to $192 million. Fortuna will pay $5,500 per acre for a five-year term with an option to extend three years for an additional $5,500 for acreage in Susquehanna, Bradford and Broom counties, Pennsylvania. The agreement also includes a 20% royalty and "landowner friendly" provisions, according to the organization of landowners. Certain New York State landowners in the Vestal and Binghamton areas will receive $500 per acre and an additional $5,000 per acre at the time the state lifts restrictions on permits and fracturing. The deal is not binding to the member landowners of The Friendsville Group, and each landowner was to have until Sept. 27 to sign the agreement with Fortuna. At that time they could consider offers from other companies. Other companies have made competing offers since the letter of intent was signed with Fortuna. Knight Ridder reports Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) has made an offer of $5,750 per acre with a 20% royalty with no option for renewal. On its website, The Friendsville Group warns that other offers outside the negotiated agreement with Fortuna do not contain the same landowner-friendly provisions, including fully developing the land within 10 years, testing the water before and after drilling, and disposing drilling mud offsite rather than burying it. Other reports said Hess Corp., Houston, (NYSE: HES) had made an offer of $3,500 per acre to area landowners, but were hampered by disagreements over drilling rights and property usage.