ST. CLAIRSVILLE - Marcellus and Utica Shale natural gas drilling seems to be taking off in Belmont County - so much so that a leasing company paid mineral owners as much as $60 million last week.
With 20-30 gas abstractors searching for mineral owners in the county recorder's office on a daily basis, there may be much more money on the way for those who own gas rights in Belmont and neighboring counties.
"They have been here in full force for about two to three months," Belmont County Recorder Mary Catherine Nixon said of the abstractors. "Before they came, we would just have a few local attorneys here on a daily basis.
Article Photos
Photos by Casey Junkins
As natural gas drilling expands throughout Belmont County, residents can expect to see frack trucks, like these parked near America’s Best Value Inn on National Road outside St. Clairsville, driving along the roads.
"Now, we have 20-30 of them every day. Some of the attorneys are now complaining that they can't even get to the books anymore," she added.
Having the abstractors dig through the property records has yielded Nixon some unexpected revenue, as her office brought in about $5,000 on July 25 alone for recording leases and copying materials.
This included 127 new lease agreements for Ebensburg, Pa.-based Tri Star Energy Holdings.
"All of this activity with the abstractors has really given our office quite a boost," Nixon said.
Those abstractors work for a number of companies that either drill for natural gas or are hired by large gas producers to do the title searching in preparation for drilling activity. Among the drilling and leasing companies now digging through property records in Belmont County in addition to Tri Star, Nixon said, are:
Kip Tygard, managing partner of Wishgard, said his company planned to pay out $50-$60 million in lease revenue to property owners in Belmont and northern Monroe counties last week.
"Car dealerships are going to be doing well. Tractor supply companies will be doing well. It will be a big boost to the economy," he said.
One should keep in mind that Wishgard is just one of the companies paying lease revenue in Belmont and neighboring counties. Moreover, these upfront lease payments do not take into account the gas production royalties - usually ranging from 12.5 to 18 percent - the companies will be paying mineral owners if or when the gas starts flowing.
Wishgard, itself, is not a natural gas producer, Tygard noted.
"Oil and gas companies hire us to lease land for them. We now have about 90,000 acres under lease in eastern Ohio," he said.
Tygard said most of the companies operating in Belmont and surrounding counties are pursuing natural gas from the Utica Shale, a rock formation that is actually deeper in the earth than the Marcellus.
"It's really hot right now," he said. "We knew Belmont had a lot of potential."
The Utica Shale play in Belmont and other local Ohio counties is so large that Aubrey McClendon, chief executive officer of Chesapeake Energy, announced in his company's recent earnings statement, "Having achieved successful results from recent drilling activities in eastern Ohio, Chesapeake is announcing the discovery of a major new liquids-rich play in the Utica Shale." He said Chesapeake is now drilling into the Utica with 16 operational rigs, with plans to increase the number to 40 by 2014.
The liquids of which McClendon speaks consist of ethane, butane, propane and pentanes. The presence of these liquids make the gas more valuable because producers get to sell these elements in addition to the regular methane natural gas.
Another company signing leases in Belmont County now is Phillips Resources Inc.
The largest oil and natural gas company in the world, Exxon Mobil, recently paid $1.7 billion to acquire Phillips.
Tygard said Wishgard sold the leases in its latest deal to Gulfport Energy, noting that company plans to have a well in the ground within nine months.
"When we first came here, companies were offering $50 per acre," he said. "We forced those other companies to step up their game to give people a better deal."
