Sunday, October 16, 2011 THE DALLAS POST PAGE & SCOUTS HIKE PINCHOT TRAIL GETTING The Dallas Baptist Church Youth Group hosted a Bring a Friend Bash for students in grades 6 through 12 on Octo- ber 8. Games were played and food and refreshments were served. Here, Jenny Dickerson plays a ball game at the get-acquainted event. Sem CHARLOTTE BARTIZEK/ FOR THE DALLAS POST | Seven Cubs Scouts from Pack 155 recently completed a five-mile day hike on the Pinchot Trail | in Thornhurst. The hike began and ended at the parking area located on Thornhurst Road. Zumbathon held During the hike, the Cub Scouts were able to visit a firetower located on top of Pine Hill and the Zumba instructor Gina Boyle, | views from this tower were spectacular. Shown here are, from left, first row, Brendon Austin, of Sweet Valley, participated in a STORM | Joseph Sowga, Matt Cheskiewicz, Allison Jones, Mikayla Sowga and Emily Banta. Second row, Pasty in Pink” Zumbathon on Jacob Banta, Austin Sowga, Heath Jones and Dan Jones. October 2 at SWEAT. Fitness | Studio in Plains. | DAMAGE? ALLTYPES OF REMODELING Roofing + Siding « Structural Repairs and Replacement « Drywall | PEOPLEBMERS vores (RN| TWILIGHT Conrad completing ~~ eniyenic nee, (SSISSANE internshi nope ase DINNER internship gree in applied science from Po Luzerne County Community 1118 Wilkes University student College. She went on to earn | is be PE C IA ! bn, | Cory Conrad, of Dallas, is com- ’ | On gay Se s * Interior Damage both her bachelor’s and mas- . ; pleting an internship for the ter’s degrees in nursing from Starting at We Will Work With Your fall 2011 semester. Misericordia University and in | gE — \ | Insurance Company! A senior studying entrepre- May 2011, graduated from the ~~ [J * nN | newrship, Conrad is completing Misericordia University Family. PRI Prompt - Reliable - Professional | an internship with Maslow Nurse Practitioner Program. | | | Lumia Bartorillo Advertising She is currently pursuing her A @& | MICHAEL DOMBROSKI CONSTRUCTION | c., of Wilkes-Barre. Ph.D. in nursing through Villa- [J | e is the son of Mark and nova University. | ; Monday through Satur day 4:30-5: 30 PM 25 Years Experience herese Schiowitz and Phil and her husband, Dr. pil Ll : r——— ANE. ANE. Virginia Conrad. Popes het fash two chil- Phone: 696-3580 www. FIREandICEonTOBYC REEK.com 5 70 406 5 1 28 | 5 70 406 9682 dren, Kelly and Ryan. RT 309, Trucksville - Just North of Sheetz (Former Yesterday's Location) | PA#031715 + Fully Insured Evans named center director Angela Evans, RN, MSN, CRNP, FNP-BC, of Noxen, has been named director of the Misericordia University Health & Wellness Center on campus. Timing Can Reduce Taxes for Marcellus Shale Gas Landowners by Scott P. Borsack, Esq. There are many time worn sayings teaching us that acting too quickly or not quick enough can have negative consequences. The experience of landowners in the Marcellus Shale region have at times supported both sides of the coin. When dealing with taxes, particularly estate, inheritance and gift taxes, the consequences for failing to act or not acting soon enough can be significant. These taxes are all about value. The higher the value, the greater the tax. The more certainty in realizing the value, the fewer the discounts available to drive down the value. He in previous discussions in this space we have explored the very significant estate and inheritance taxes which can be due shortly after death for the landowner who does not properly and timely plan. Some will choose to wait until it is absolutely clear that their natural gas royalties have significant value. Others will assume that the rush to sign landowners to leases by large exploration companies must mean that someone knows something about the future value of the gas trapped below the surface. For those who act before the subsurface riches are brought through the pipelines running past their property, the opportunity to reduce or eliminate taxes is very real. Wait until the determination of value is as simple as plugging numbers into a mathematical equation and opportunities are lost. In this case, factoring risk into the equation can yield a positive result, The time to plan is when risk is at its height. in our last installment, we looked at a 400 acre parcel with five wells that might yield royalty values of more than $25 million. Until a well is actually drilled and fractured, all that anyone can do is guess about actual production. However, when a well is drilled and natural gas extracted, most of the guess work is over. Geologists can provide estimates of likely production over the life of a well once initial production is determined. Waiting until the guess work is over and value is clearly under- stood could be costly. As much of $16.95 million in taxes could be due if a transfer of rights is made in 2013 and thereafter. We Care Every Day, Additionally there are a host of risks associated with the extraction of natural gas all of which impact upon the value In Every Way of royalty rights. Some of those risks evaporate once production begins. For example, the landowner has no control over : ienced Senior when exploration begins, and once it begins at what pace it is undertaken. Some exploration companies withhold drilling 4 Exper Gna a activities until several years after a lease is signed, and then not at capacity for some time. The exploration schedule can not i ' care for total peace of mind gr oo] be predicted. Until exploration begins no one can be sure about the yield of a well. There is pricing risk of the commodity, . rc here natural gas. As the price in the marketplace fluctuates, so does the value of the royalty right. There are political risks to be considered as well. Drilling activity could be curtailed for any one of a number of reasons. New York State still has a drilling moratorium in place. What about environmental issues, ground water contamination and the potential problems which may be caused by water containing a witches’ brew of substances used to “frac” a well? There are transportation issues to be considered. How likely is full scale exploration when the site is far from existing pipelines? How will royalty rights be affected by additional taxes that may be enacted in the future. All of these issues impact upon the value of gas royalties. In the aggregate these risks are greatest before production begins, Once a well starts to produce, many of these risks are addressed or eliminated. Respite Care for Families Live-in Care a : Faced with the question of what a natural gas royalties are worth today before any exploration has begun, considering the www.isitingAngels.com ga aa host of risks which negatively impact value, a valuation expert might suggest that the right is worth less today than it would i : ne be when may of the risks are resolved. Waiting until production begins eliminates many of the risks which could reduce the estimated value of royalty rights. The fewer the risks, the higher the value of the royalty right. The current market value of royalty rights for a site with a best case scenario for value of $25 million could actually a fraction of that. Wait until the Visits 's Chips in Homans, property starts producing natural gas and those discounts are lost and the market value higher than it is today. “lucsgngels gels NE) Ho ad The time to plan is now, before your property starts in production. in our next installment we will discuss some of the Hi ie techniques and opportunities available to landowners now to deal with increasing royalty values. You a are e Invited te to the Marcellus Shale Tax Concerns Seminar dr Presented by Scott Borsack Join us for an informative free program addressing various income, gift, estate and inheritance tax concerns for Marcellus Shale landowners: ; How can you eliminate estate, gift and inheritance taxes through gifting? How should royalty rights be owned? How do estate, gift and inheritance taxes Bission you and your family? How have royalties values changed in the past 12 months? Sh ~ When are tax payments made? What tax provisions will expire at the end of 2012? ( FREE ADMISSION WALGREEN - FLU CLINIC There is no charge for wie educational program, but please register by calling 800.451.8189 October 2011 Semi Dates and Locations ! fore YE NDORS Register for either seminar by calling 800.451 8189 | Wednestiay, Octobe 26 7:00 : | * JEWELRY he Sayre From Savor uns ora. 3 WwW. Lockman st, ‘say. PA 8840 LIDAY TREAS © ad she . 200 Franklin Ave. Tunkhannock, PA 18657 + BAKE SALE « LUNCH FOR PURCHASE at the For more o information, ‘Please visit WWW. marceliusshaletax com. This event is Sponsored by: M&T Bank nie ye Lo prin | 3650 Marker Stoo ~~ AMsT Bank One Liberty Place, Suite 1800 an & iv This convounination 80d PATICIBAION In THiS AveNt 3S not ar Sndoreament by | Philadelphia, PA 19103 | ; os nghiionaiimonsphutlymind- tie Sonifiicoth gy Phone: 215.864. 7048 Brit S00 ISUTRNCE HOXRICHS ANd SAiCos. You Souk DONS WI Yur OW tax SIS SATGSIING Be 18 USDSSES 18 DEF Wouier SCTOnN sch G AND REHAB : CENTER Attomey Advertising, 189 Croan 0 Note To sre compliance wih canuin Tequistions pro uigaied By the (1S Internat Fievanus Service, we infor you the arty federal tax Brice contained in this coninRaucRBon 18 008 BOUL Of seritian by bio Used, ancl cannor ba used bY shy SaxuBeer ior LUTIMGRE : E. Center Hill Rd. taxrlated penalties urder the US. internal Revenue Coda, ot (2) promoting, marketing or rico hericing | Ws arcsitiar Dany any tax related mates addiessed { Dallas, PA f 675-8600, x195 from Misericordia University
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