Group Seeks to Lease 40K Acres to Drillers

MORRISTOWN – Belmont County continues to be a hotbed for Utica Shale activity, as a group of landowners is looking to lease more than 40,000 acres to a company satisfying its terms.

“We have spent months dealing with CEOs and vice presidents. Seven companies have agreed to make proposals for our land,” said Larry Cain, chairman of the Smith-Goshen Landowners Group, whose members met at Union Local Middle School Tuesday.

Another group of Belmont County landowners signed Utica deals with Exxon Mobil subsidiary XTO Energy a few weeks ago. The terms of this contract called for the owners to receive $4,950 per acre on lease payments and 19 percent on production royalties once gas starts flowing from the property.

Although Cain did not want to discuss the exact monetary terms his group of about 400 property owners is seeking, he said the amount could exceed $5,000 per acre. Even at a minimum of $5,000 per acre, 40,000 acres would yield $200 million in lease payments for the Belmont County owners. This would break down to an average payment of $500,000 to each owner, though this amount would vary significantly based on the amount of acreage the individual owner is contributing to the group.

The group hopes to get the highest royalty rate available, along with securing the most landowner and environmentally friendly lease.

“If we can bring checks like this into the area, it can be a life-altering event,” Cain said. “This is going to impact us for generations because they say these wells can produce for many years.”

The group is so-named because 85-90 percent of the acreage lies within the Smith and Goshen Townships, in the heart of Belmont County. Communities included in these townships are Bethesda, Belmont, Centerville, Jacobsburg, Lamira and Warnock. The remaining acreage is found in surrounding townships.

“Much of the acreage is farmland, with some of it in wooded areas,” said Cain. “Some of it is primarily used for recreational purposes.”

The group – which Cain said will accept new members and additional acreage until one of the seven companies decides on how much acreage they want to acquire – allows members to avoid having individuals come to their homes.

“The advantage is that when you control a larger block of acreage, you have more negotiating power. This lets you surpass the ‘landmen,'” said Cain. “We have already set up possible drilling pads for the companies so that all they have to do is apply for permits (from the Ohio Department of Natural Resources). We have already done some of the work for the drilling companies.”

Noting most of the mineral owners also own the surface on top of the Utica Shale, Cain emphasized the owners want a lease that will guarantee protection of their farms and water supplies.

“We want a very landowner-friendly lease to make sure we are protecting our land and water. We also want to clearly define exactly what we are leasing,” he said. “We feel we are in a very good position right now, and we just want to receive fair compensation for our minerals.”