Columbiana County Lease with Chesapeake, Highest Bonus Ever
Columbiana County, OH has just signed a deal with DPS Penn (an agent for Chesapeake Energy) to lease 548 acres for Utica Shale drilling. And they astutely doubled their money from the original offer from DPS a year ago. The new terms of the deal, just signed, are for $5,850 per acre and a 20 percent royalty. Columbiana also negotiated the lease term down to three years. A typical lease is five years.
The deal makes Columbiana breaks the record as the highest signing bonus granted to any government body for a Utica (or Marcellus) Shale lease deal.
Commissioner Chairman Mike Halleck reported at this week’s meeting he had signed a lease agreement on behalf of the board with DPS Penn for $5,850 an acre, compared to the $2,700 figure they originally agreed to last August.
The county will now receive $3.2 million, but $1.5 million of that is going into an escrow account to help the Buckeye Water District (BWD) pay the $4.8 million-plus court judgment it owes the city of East Liverpool.
The lease with DPS Penn, an agent for Chesapeake Energy, is for 548 acres instead of the original 568 acres of county property after 20 acres were removed because of title problems and other issues.
The county also would receive 20 percent royalties on any gross revenue received should drilling occur under county property, and the lease is for three years instead of the standard five years, "so we can possibly get another bite of the apple," Halleck said.
The $5,850 represents the highest lease fee paid to any government body to date by $50.*
*Lisbon (OH) Morning Journal (Jun 20, 2012) – County seals lease deal