Chesapeake Energy Slated to Start Drilling in the Utica Shale in Columbiana County, OH this Fall

Last week, Chesapeake Energy announced (via it’s quarterly earnings statement) a major revelation—that it has struck oil as well as natural gas liquids and natural gas, in the Utica Shale of eastern Ohio. Columbiana County, OH is in the hot zone and stands to reap millions in revenue.

In the run-up to the announcement, Chesapeake has been busy signing deals with landowners in Columbiana County, including leases with local municipalities and school districts:

In July of this year, Columbiana County commissioners signed a $1.3 million lease with the company.

According to the five-year lease agreement, the county will receive $2,250 for each of the 568 acres leased, plus 17.5 percent royalties should drilling produce any oil and natural gas.

Just south of the county seat, the Beaver Local School District agreed in April to lease all of its 132 acres to the company at $2,250 an acre and 17.5 percent royalties as well. The Southern Local School District entered into an agreement with the company that same week.*

Where and when will the drilling begin in Columbiana County?

The company [Chesapeake] currently has five rigs located in the Utica Shale region-including Columbiana and Carroll counties-and hopes to have 20 in operation by the end of 2012, according to the announcement.

Jeff Bailey, of the Associated Landowners of the Ohio Valley (ALOV), said drilling is expected to begin in Columbiana County in November.

He said Chesapeake Energy will likely start with a well located on Smith Road just south of Beaver Creek State Park.

The well lies in Middleton Township but the drilling unit extends Southeast into St. Clair Township, covering 230 acres.*

How much land has already been leased, and how much more is available to be leased?

Bailey said around 10,000 acres in Columbiana County have been leased and at least 100,000 acres are currently up for bid in the eight neighboring counties.

Those figures do not include land leased that the ALOV is not representing, he added.

"There is going to be an immense amount of money (coming in) shortly," he said.*

*Lisbon Morning Journal News (Jul 31, 2011) – Chesapeake announcement could mean billions for county