Muskingum Watershed District Signs New Deal for Utica Drilling

The Muskingum Watershed Conservancy District has just signed a deal with Sierra Buckeye of Houston to allow Utica Shale drilling on 185 acres of District-controlled land—and it got some VERY favorable terms for the deal.

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.

Although 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 itself. It retained deep mineral rights below the surface as part of a sale many years ago, district spokesman Darrin Lautenschleger said.

The owners of the surface land already have a deal in place with the company, the memo states.*

In April, the Conservancy District board approved a deal on 3,700 acres in a deal with Chesapeake Energy, and in 2011 they leased acreage to Gulfport Energy:

At the April meeting, the board approved a deal with Chesapeake Energy for 3,700 acres at Leesville Lake in Harrison County for a total signing bonus of $21.5 million. They also signed a lease with Gulfport Energy worth $15.6 million in summer 2011.*

*Zanesville (OH) Times Recorder (May 19, 2012) – Muskingum Watershed Conservancy District accepts another drilling proposal