Letter from Lebanon Supervisor Jim Goldstein

Dear Fellow Supervisors and County Lawmakers:

You may already know but Emkey Resources, the principal operator and owner of the natural gas wells, gathering system, compressor station and pipeline systems in the towns of Lebanon, Eaton, Hamilton and Georgetown, has “voluntarily” filed Chaper 11 bankruptcy proceedings in Dallas, Texas as of Feb. 8, 2016 and a meeting was held February 12 in Dallas, Texas to form an unsecured creditors committee.

Property owners are already receiving paperwork on this matter who have gas lease or royalty arrangement with Emkey.

I received notice about a week ago as Town Supervisor along with a check for gas well royalties from a compulsorily integrated well in the Town of Lebanon under town property at the historic Campbell Cemetery, that is part of the county tour and abolitionist tours, and where Emkey insisted on drilling under and was granted permission to do so against the wishes of our town by the DEC. The royalty amount came to ——–TWENTY FOUR CENTS!!!—-and I have saved the check along with the one cent and ten cent checks our town has received from Norse aka Emkey in the past for show and tell when warranted.

Property owners and those who are compulsorily integrated have received mail notices of this development but I wanted to make sure our town and county assessment unit and tax department are aware of this and its potential budget impact.

And yes, this is the same Emkey who sought successfully to have their compressor station tax bill dramatically reduced with DEC help after state tax authorities wrongly advised our assessors on the assessment process.

Good job, NYS, in assisting a “well run company” once again with questionable permitting and obviously remarkably favorable regulatory treatment that will now have to file bankruptcy.

The former Norse Energy, which lost $100 million drilling for gas in the region and our township, transferred most of its assets to Emkey Resources which was originally run by the former head of Norse. We were informed months ago that they had closed their New York offices and relocated to Houston.

This is the second natural gas development company to go bust in three years here in Central New York. Is anyone paying attention?? And landowners owed royalties may find themselves in line behind other creditors for their royalty payments now. Emkey made one last distribution of royalties about a month ago before announcing this action.

Property owners and farmers with lease and royalty agreements should seek direction from legal counsel as to how to proceed.

Renewable are our future, not natural gas development. This is just one more reminder.

Jim Goldstein, Lebanon Supervisor
My town is losing almost several million in assessment yearly now courtesy of the wonderful state of New York system of assessing natural gas revenues as real property rather than having a gas tax.