Ohio 233 - Marcellus Drilling News

Some OH Landowners Get $5,800/Acre While Neighbors Get $4/Acre

May 23, 2012May 23, 2012

contract A cautionary story for landowners comes from Columbiana County, Ohio. Some landowners, like Patrick and Jill McNicol, own land encumbered by old gas leases going back fifty years they knew nothing about. What does it mean? They’ll get $4 per acre for their land (and no royalties), while their neighbors will get $5,800 per acres and 12-20 percent royalties.

Is there any recourse for the McNicols? Maybe.

Columbiana County Port Authority Leases Land to Chesapeake

May 23, 2012May 23, 2012

The Columbiana County (OH) Port Authority voted on Monday to lease 43.9 acres of its property in Beaver County, PA to Chesapeake Energy.

Louisville, OH to Sell Chesapeake Water for Fracking

May 22, 2012May 22, 2012

The Louisville City Council (Stark County, OH) passed an agreement yesterday to sell both potable and treated sewage water to Chesapeake Energy for their use in fracking Utica Shale wells. The water purchase agreement runs through 2017.

Chesapeake Sells More of its Utica Leases to Total

May 21, 2012May 21, 2012

Last week Chesapeake transferred 90 percent ownership of their 9,000 Utica Shale leases in Columbiana County, Ohio to their French partner Total in return for $2.03 billion. Back in December Chesapeake did an initial deal with Total for a 25 percent ownership stake in Chesapeake’s Ohio Utica Shale leases for 10 Ohio counties. This latest deal does not grant Total 90 percent in all 10 counties, so the question is, why Columbiana in particular? In two words: headache relief.

Energy Companies | Lease & Royalty Payments | Ohio | Sierra Buckeye | Statewide OH

Muskingum Watershed District Signs New Deal for Utica Drilling

May 21, 2012May 21, 2012

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.

GASFRAC Waterless Fracking Technology Debuts in Utica Shale

May 18, 2012May 18, 2012

Utica debut An unnamed driller in Ohio has asked Canadian company GASFRAC to use its waterless fracking technology to drill two trial wells in the Utica Shale. You may recall that a group of Tioga County, NY landowners with a collective 135,000 Marcellus Shale acres were set to use GASFRAC’s LPG (liquefied petroleum gas) technology to jump start drilling in New York, but the lease and royalty deal with the driller, eCORP, fell through (no fault of GASFRAC, see this MDN story).

Will GASFRAC’s innovative technology do the trick in Ohio’s Utica Shale? There’s some disagreement on that point.

Carrizo Gets Utica Permit for Trumbull County, OH

May 18, 2012May 18, 2012

Carrizo Oil & Gas has just received a permit for drilling in the Utica Shale in Trumbull County, Ohio. But the company says it’s not going to start its exploratory drilling for the foreseeable future, at least in Trumbull because Trumbull has more restrictive road repair demands, so instead Carrizo will drill its first Utica exploratory well in neighboring Mercer County, PA where the demands on road repair are not as restrictive.

Ohio Driller Eyes Abandoned Railroad for Innovative Use

May 18, 2012May 18, 2012

One of the more interesting stories (to MDN anyway) over the past several years has been that of how short line railroads are seeing a comeback because of shale gas drilling. Perhaps it’s the romanticism of a bygone era that appeals. Some of the uses for old short line railroad beds have been innovative—things like “dual use” corridors where rail trails and pipelines have been run together.

But there’s a very new and interesting twist on this story MDN has just noticed. In at least one Ohio location, an energy company wants to lease an abandoned rail line, but not for pipelines and not to run trains on it…

Hydraulic Fracturing | Industrywide Issues | Ohio | Statewide OH | Taxation

Ernst & Young’s Analysis of Ohio Proposed Severance Tax

May 18, 2012May 18, 2012

Yesterday MDN wrote a story about a newly released study by Ernest & Young that purports to show that Ohio’s oil and gas taxes are the lowest in the country, and would remain the lowest even if Gov. John Kasich’s plan to boost those taxes were to be adopted (see this MDN story). MDN stated that we could not find a copy of that study to review the data. Thanks to two intrepid MDN readers, we now have a copy (embedded below).

Energy Companies | Halcon Resources | Lease & Royalty Payments | Ohio | Trumbull County

Trumbull County, OH Landowners Receive Lease Checks

May 17, 2012May 17, 2012

pile of money Landowners in Trumbull County, Ohio—some 50 to 60 families—are now collectively $7 million richer since receiving their lease signing bonus checks. Including Richard and Ida Faber, who received a check yesterday for $701,580—almost $3,000 per acre.

Carroll County | Chesapeake Energy | Energy Companies | Ohio | Statewide OH

Chesapeake’s Troubles Mean a Slowdown for Ohio

May 17, 2012May 17, 2012

Carroll County, Ohio is starting to feel the negative effects of Chesapeake Energy’s troubles, as noted in a story yesterday in the Cleveland Plain Dealer. Because of recent revelations of debt financing, private hedge funds and other practices by Chesapeake CEO Aubrey McClendon, and a resulting fall in Chesapeake’s stock price and credit rating, drilling industry activity in Carroll County has slowed down—a lot.

Industrywide Issues | Ohio | Statewide OH | Taxation

New Study Says Ohio’s Gas Severance Tax Lowest, Even If…

May 17, 2012May 17, 2012

A new study released by the accounting firm Ernst & Young says that even if Ohio Gov. John Kasich gets his way and boosts the severance tax in the state on oil and gas drilling, Ohio’s severance tax rate would still be less than other states. Kasich wants to rob Peter to pay Paul, taking even more money from energy companies and landowners in the form of higher severance taxes in order to reduce the state income tax for everyone.

Apparently the Ohio Business Roundtable is in Kasich’s hip pocket because they are the ones who commissioned the study. This is the first time MDN has ever heard of a “business group” who wanted higher taxes.

Hydraulic Fracturing | Industrywide Issues | Ohio | Trumbull County

American Rivers Yearly Fundraiser/Most Endangered Rivers List

May 16, 2012May 16, 2012

The anti-drilling American Rivers, an organization with a lofty Americana name but with a hard left environmentalist agenda, issues their “top 10” most endangered rivers list each year about this time. It’s an amusing exercise because the list rarely contains any of the same rivers on it from year to year. This year’s list is no different—and of course one of the targets of the list is shale gas drilling.

MDN Analysis of Rig Counts in Marcellus/Utica

May 15, 2012May 15, 2012

Drilling rig counts are closely watched as an indicator of where, and how much, drilling is happening in a given geography. Last Friday, Baker Hughes reported that rig counts for Pennsylvania continue to decline from a year ago, while the numbers for West Virginia are going up. But that doesn’t quite tell the whole story.

Advice to Landowners About Interstate Pipelines

May 15, 2012May 15, 2012

Let’s be honest. Using eminent domain to force landowners to allow interstate pipelines to be run across their property is a bad idea. At least it is in MDN’s opinion. Some pipeline companies have sought and have been awarded public utility status, and that status allows them to use eminent domain to grab property to run pipelines. It’s disgusting. They are not public utilities in the way a power company is a utility that needs to put up electric polls.

Two lawyers from Columbus, Ohio caution landowners to get a second opinion when it comes to negotiating to have pipelines runs across their property, like the ATEX Express ethane pipeline that’s currently being built across Ohio. They also counsel that although eminent domain can force landowners to allow a pipeline, landowners still have at least some rights under eminent domain.

Industrywide Issues | Ohio | Statewide OH | Wastewater

Ohio Dem Wants Feds to Investigate Injection Wells

May 15, 2012May 15, 2012

Here’s a new twist on the “fracking contaminates ground water supplies” argument that MDN has not seen before…