|Many Amish Selling Land To Flee Encroaching Oil Boom In Ohio, Cashing In On Royalties
By Ernest Scheyder
ST CLAIRSVILLE, Ohio, Dec 20 (Reuters) - Farmers in the close-knit Amish community who eschew electricity and most technology, are among landowners capitalizing on a new financial trend in the United States energy boom - selling decades of future oil and natural gas royalties for an immediate pile of cash.
Gulfport Energy Corp, Chesapeake Energy Corp , Anadarko Petroleum Corp and others have spent billions developing oil and gas reserves on land in Ohio's Utica shale formation - often by agreeing to give landowners years of royalties, or a cut of future production, in exchange for the right to drill on their land.
Some Amish, traditionalist Christians numbering about 280,000 across the United States, are sitting on prime drilling land in eastern Ohio, but many say the rapid development is encroaching on their pastoral way of life.
Already this year, several oil trucks have been involved in fatal collisions with Amish horse-drawn buggies in the region's narrow and winding roads.
So, many Amish are cashing out to escape the noise as their bucolic landscape of lush green hills becomes dotted with oil storage tanks and rumbles with the buzz of oil rigs.
"If all this traffic and development is crazy here today, what's it going to be like in three or four years?" Eli Byler, a member of an Amish community in Ohio's Guernsey County, said at his farmhouse, his 4-year-old grandson bobbing on his knee.
Byler, who mills walnut timber for furniture, decided earlier in December to sell half of his future oil and natural gas royalties to Flatiron Energy Partners, a private firm that specializes in those transactions.
Flatiron is paying Byler $221,195 cash, an amount that will be tax-free thanks to an arcane part of the U.S. tax code if Byler follows through on plans to relocate his family to Pennsylvania.
Byler's deal is part of a larger wave of companies like Flatiron paying cash up front for oil and natural gas royalty interests, deals these companies hope will provide their clients - typically family trusts and other wealth funds - guaranteed income for decades in the form of royalty checks.
At least 35 other Amish families plan to sell their royalty rights and make an exodus from the Buckeye State to parts of Pennsylvania or New York state with little or no energy development, said Byler, who plans to sell the full 53.3 acres he owns on the surface, including his homestead, in a separate deal.
Neighbors are joining Amish families in selling out.
"For many landowners, selling royalty rights is the best way to reduce their risk and take cash," said Austin Eudaly, Flatiron's vice president of acquisitions. "Selling is not for everyone, but for landowners in eastern Ohio, including the Amish, its a great option to have."
Thanks to the Flatiron deal, Byler also will not have to worry about the controversial trend of energy companies deducting transportation and other post-production costs from royalty checks, which Reuters reported on earlier this year.
With this latest development in the U.S. energy boom, the Amish and other landowners in the energy-rich states of North Dakota, Texas, Pennsylvania and Ohio have found a way to wring more cash out of their property than they initially received from energy companies.
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