Lake Area Leased for $15,000 Per Acre
PIEDMONT, Ohio – For a lease worth $15,000 per acre – an amount more than twice the previously known high payment for Marcellus and Utica shale exploration in the Upper Ohio Valley – Antero Resources will drill on more than 6,300 acres at Piedmont Lake.
The resulting payment of nearly $95 million to the Muskingum Watershed Conservancy District – not including the 20 percent of production royalties that will come once Antero begins extracting oil and gas from the property – will also help the district reduce the amount of taxes it collects from eastern Ohio landowners.
During a Friday district board meeting, members voted to approve the lease with Denver-based Antero. Another 300 acres of the Piedmont property is being finalized to be added to the lease later. The vast majority of the lake itself lies in northwestern Belmont County, while it stretches into southern Harrison County and the extreme northeastern corner of Guernsey County.
District leaders said they followed the same public input process prior to leasing Seneca Lake property in Guernsey and Noble counties in 2013, also to Antero. During a January public hearing, district officials said up to $19 million from the lease signing could be used to improve the Piedmont Lake Marina. Along with Piedmont, the district manages several large eastern Ohio lakes, including Tappan, Clendening and Seneca.
District officials said they expect up to two well pads to be located on the Piedmont property, with other well pads located on adjacent properties.
Horizontal drilling allows companies to extract gas from thousands of feet within the earth without placing a well on the surface directly above the mineral pocket.
According to the district, some of the environmental protections featured in the lease include allowing district officials to review and approve erosion control and construction plans; surface operation requirements that include specifications on drilling operations and reclamation efforts; and light and sound controls, as well as seasonal restrictions on drilling to reduce the impact on the community.
Also during the Friday meeting, district board members agreed to cut the property taxes they collect from eastern Ohio landowners by 50 percent, beginning next year, due to the new funds being collected from the lease agreement.
According to the district, it collects about $11 million annually in assessments from property owners. Assessments are collected through landowners’ county property tax statements from owners of property in all or portions of Ashland, Belmont, Carroll, Coshocton, Guernsey, Harrison, Holmes, Knox, Licking, Morgan, Muskingum, Noble, Richland, Stark, Summit, Tuscarawas, Washington and Wayne counties.
The taxes the district collects must be used to pay for projects and programs that protect the operation of the system of 16 dams and reservoirs that were constructed nearly 80 years ago for flood reduction and water conservation.
Nearly 95 percent of all property owners subject to the assessment pay the minimum annual amount of $12 per year.
“The MWCD recognizes the ever-increasing need for these projects in order to protect and enhance the quality of life and economy of eastern Ohio,” said John Hoopingarner, the district’s executive director and secretary. “We believe it is not only prudent, but a responsibility of the conservancy district, to return some of the benefits the oil and gas leases have generated for the MWCD to the property owners in the form of a reduction in their annual assessments.”
State Sen. Lou Gentile, D-Steubenville, thanked the district for providing the rate reduction.
“I am especially interested in this process since much of the oil and gas development is occurring right here in the district that I serve, and I understand that we need to identify ways for many of our communities to realize benefits from this investment in our area,” he said.