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Though it's the big banks that are working with energy companies, smaller institutions still expect huge opportunities, some risks aside, to serve ancillary businesses and consumers.
January 12
Sitting atop a small sliver of the Marcellus Shale, the plainly named Community Bank in southwest Pennsylvania has become a key liaison between local residents and drillers of the world's second-largest gas field.
When energy producers first started tapping into Pennsylvania's share of "the Marcellus" in 2007, there was a dearth of information available to the community. That's when Barron P. McCune Jr., president and CEO of Community Bank, saw an opportunity to assist his neighbors while also prospectively growing his publicly traded bank.
With limited funds for marketing, the $534 million-asset Community Bank was able to promote itself by becoming a successful communication hub for the region's new drilling activity.
The 111-year-old bank built a souped-up website, accessible by customers and noncustomers alike, posting local business news, links to current articles about the Marcellus, an archive for older news stories, a business events calendar, links to related consumer groups and a well-stocked virtual resource center for organizing and managing small businesses.
The site also contains a royalty services section that tells landowners what they should consider before or after signing on the dotted line with a gas company. Topics range from basic issues, like making sure their royalty checks are for the correct amount, to heavier topics like environmental consulting and wellhead operations, or the kinds of work that will be occurring on or near their property.
McCune's proactive approach has led energy producers and landowners to open accounts at Community Bank, through which royalty transactions are effected. And his efforts have expanded the role of the Washington, Pa., bank far beyond what might be expected.
In 2008, Community Bank lit up a local fairground with a "Tri-County Oil and Gas Expo." It was the first public event in southwestern Pennsylvania to focus on the coming Marcellus boom, says McCune. The expo featured energy industry experts from as far away as Wyoming, along with local government officials and commerce and education leaders. Almost 1,000 people attended.
Since then, the bank, joined by groups ranging from local business owners to environmental advocates to drilling company representatives, has held more than a dozen forums related to the area's energy development, all free to the public. "It's been pretty elaborate," McCune says.
McCune also holds seminars in rural areas, often alongside Robert H. Bishop of Bishop Wealth Management Group. (Community Bank's website refers readers to Bishop's firm for wealth management services and states that the bank may receive a portion of the Bishop Group's fees.) Bishop says that Community Bank "jumped into the middle of a major economic development," noting that the shale has lured energy companies including Exxon, Shell, Chevron and Range Resources to the region.
The drilling activity means that the bank has branches in an area where hundreds, if not thousands, of landowners are in need of information on what's occurring, Bishop says. "An eight-well pad [eight wells drilled together] on a farmer's property can mean an incredible economic change in their life."
McCune admits that most of the bank's operational assistance regarding the Marcellus involves directing people to other professionals, such as lawyers, accountants, wellhead servicers and environmental businesses. But he says he is comfortable educating customers about the right questions to ask. Having his own farmland in the shale region helps.
"I negotiated leases on my land. I have title issues. I've had wellhead consultants inspect the gas infrastructure on my land. My neighbors all have the same issues."
McCune says he is particularly proud that his bank has had a role in "connecting people in the area with Marcellus-related jobs at the height of the recession."
Nan Sninsky, the Washington County administrator for PA CareerLink, a state jobs program, credits Community Bank with assembling a team of oil and gas industry representatives to create a career expo. The first expo, in 2009, attracted 2,000 jobseekers, she says.
The bank has sponsored job expos every year since.
