How could the Times-Reporter miss the following story about the Muskingum Watershed Conservancy District (MWCD) leasing gas and oil rights to out of state drilling companies? One would suppose, with the economy in the condition it is, that the implications of this pending agreement between MWCD and a Houston driller would be important enough for the Times-Reporter to run a story in an effort to keep New Philadelphians up to date on drilling progress in Tuscarawas County. Evidently I'm mistaken. Fortunately newspapers from Mansfield and Coshocton, as well as others, have seen fit to bring us up-to-date with current reports. Here's one for your information.
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Original article by Russ Zimmer, Mansfield News Journal, May 21, 2012
The Muskingum Watershed Conservancy District has approved the leasing of oil and gas rights to another out-of-state energy company in pursuit of the Utica Shale.
At Friday's monthly board meeting, the district's board agreed to allow Sierra Buckeye, of Houston, access to the natural gas and liquids under a 185-acre tract of land close to the Dover Dam in Tuscarawas County.
Though the lease has not yet been finalized, the proposal calls for the 18-county district to receive a bonus amount of $4,500 per acre, or $832,500 total, plus a 20 percent royalty on the value of the oil and gas pumped, according to a memo provided by the district.
The district does not own the land. It retained deep mineral rights below the surface as part of a sale many years ago, according to district spokesman Darrin Lautenschleger.
The district, which is responsible for water supply and flood prevention within its borders, covers about 8,000 square miles, or about 20 percent of the state. The following counties are included: Richland, Ashland, Belmont, Carroll, Coshocton, Guernsey, Harrison, Holmes, Knox, Licking, Morgan, Muskingum, Noble, Stark, Summit, Tuscarawas, Washington and Wayne.
The owners of the surface land already have a deal in place with the company, the memo states.
Sierra Buckeye is a privately held company with shale exploration experience in the south as well as Pennsylvania and Ohio, according to its website. It has not yet sought permission to drill any Utica Shale wells in Ohio as of last week, according to state data.
The district has been selling its mineral rights for decades and regularly draws six figures in annual leasing and royalty revenue, but in the last couple of years the scale has grown substantially.
At the April meeting, the board approved a deal with Chesapeake Energy for 3,700 acres at Leesville Lake in Harrison County for a signing bonus of $21.5 million. They also signed a lease with Gulfport Energy worth $15.6 million last summer.
It costs about $19 million annually to run the district, according to the 2010 annual report, the latest available. About $9.5 million has been raised each year since 2009 from a property tax levied on residences and businesses within the district.
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