By Carol McIntire
April 24, 2012
The Muskingum Watershed Conservancy District (MWCD) signed an oil and gas lease that will bring nearly $21.5 million into the district’s treasury.
During a Board of Directors meeting Friday in New Philadelphia, an agreement was signed with Chesapeake Exploration LLC of Oklahoma to lease 3,700 acres of land surrounding Leesville Lake (all in Carroll County) for $5,800 per acre. The MWCD will also receive royalties at the rate of 20 percent of the gross value for any oil or gas produced from the land.
Darrin Lautenschleger, public affairs administrator for the MWCD, said the lease is for a term of five years, but can be renewed by Chesapeake if no wells are drilled in that time period by paying another signing bonus equal to the initial payment. The lease prohibits drilling on the property but allows horizontal legs to run under the district’s property.
The lease is limited to the depths lying below the top of Queenston formation. The Queenston shale is located in the upper level of the Ordovican period (above the Utica Shale) and below the Devonian and Siurian periods of development.
The board also agreed to sell up to 11 million gallons of water from Clendening Lake in Harrison County to Gulfport Energy on temporary basis while performing hydraulic fracturing on a nearby well. Gulfport is to pay $9 per 1,000 gallons sold.
The FPS asked Lautenschleger about the possibility of the MWCD selling water from Atwood or Leesville lakes in the future to oil and gas development companies.
He said it is too early to speculate on the possible sale, but noted there have not been any requests for temporary water sales from the lakes.
He said the MWCD has contracted with the United States Geological Survey to conduct a review of water availability for withdrawl/sales at the MWCD reservoirs.
“Because of the MWCD mission of water conservation, requests for withdrawal/sales must be reviewed by staff, according to MWCD policy and state law,” he said.
Carroll County Commissioners are in the process of negotiating a lease for nearly 500 acres of land that includes Atwood Lake Resort and Conference Center, which was previously owned by the MWCD.
Commissioner Tom Wheaton said he is negotiating with two companies and plans to have a lease ready for consideration in the near future.