Principles of Natural-Gas Leasehold Valuation

Magnitude and Econonmic Importance THE magnitude and economic importance of the problem of correctly valuing natural-gas leaseholds become evident when we consider that: (a) Natural gas is handled in 55 per cent. of the gas distributing plants in the United States. (b) Present known natural-gas acreage forms 47 per cent. of the total known mineral-land acreage in the United States. (c) Five acres of land are now required to protect and maintain continuous service to each of the 2,000,000 domestic natural-gas consumers in the United States. (d) The cost of acquiring and maintaining this acreage of an expendible resource represents a substantial part of the cost of the natural-gas service to the consumer. (e) "The right of a citizen by means of his ownership of or his mining leases on land to draw gas from beneath its surface is property and sometimes valuable property."1 A large number of other court decisions have established the basic legal principle that the right to drill for gas within a given area constitutes an interest in the land itself, and is necessarily an exclusive property right.