CONSOL Energy has started work on its first drill pad in Mahoning County, OH. And although the landowner where they’re drilling sold his mineral rights years ago and will receive next to nothing in the way of royalties or lease payments, he’s still happy about it.
Heavy dump trucks arrive every five minutes or so; about lunchtime, they’re lined up five-deep, waiting to deposit their limestone loads where Consol Energy is building its first shale well pad in Mahoning County.
It’s the first day of the trucks traveling back and forth from the limestone quarries in Petersburg to the Hendricks farm off Western Reserve Road here.
“I’m sure you noticed, they’re all local trucking companies coming in here,” says Paul Hendricks, who owns the land where Consol will drill its Ellsworth Township well.
But the dollars Hendricks got for leasing his mineral rights are not big, never have been, and [his] five gas wells were drilled on his farmland in the 1970s. Those mineral rights, which he sold for $1 an acre, eventually ended up with Dominion Energy, which sold them to Consol.
Some of Hendricks’ neighbors also sold their mineral rights more than 30 years ago and, like Hendricks, will receive royalties should the Consol well produce, but at a much lower rate than today’s 12% to 20% range. Other neighbors who sold their mineral rights in the 1970s were able to negotiate new leases at today’s per-acre rates — $2,500 to $5,000 — because no wells are currently producing on their land.
“I’m happy,” Hendricks says. “I got a free driveway out of it.”
“I didn’t realize the hundreds of thousands of dollars many people did but I’m still very, very pleased. We’ve had free gas for 30 years. How can I complain?”
Hendricks says his neighbors, for the most part, are also pleased.
“We’ve discussed it with most of the neighbors. Everybody seems to be positive. A couple had concerns about the water. Consol drew a 2,500-foot radius [from the well site] from the top hole down and did water testing. They’ve tested all these neighbors’ water.”
For future reference, the water-quality baseline was established at Consol’s expense.*
*Youngstown (OH) The Business Journal (May 14, 2012) – Consol Begins Building its Shale Well in Ellsworth