Companies working out lease values
PARKERSBURG – As deals are worked out between landowners and natural gas companies to get at the gas from the Marcellus and Utica Shale formations, various factors are considered before a company decides on an area to drill in.
Officials in the natural gas business said it is hard to come up with what an average gas lease is worth for any one area as there are variables that can impact what kind of work might be done on a piece of property.
What people might be paid depends on where their property is in relation to the gas supply, said Charlie Burd of the Independent Oil and Gas Association of West Virginia.
“There are a lot of variables,” he said. “It depends if they are on the dry side or the wet side of a formation.”
It is the geology of the area that will direct producers where to go.
The thickness, the width, the coarseness of the formation and liquid gas available in a given spot are all factors in determining where drilling operations might be set up.
Data gathered can help determine what the potential BTU content is. BTU stands for “British thermal units” and is used to measure the energy content of natural gas and other forms of energy or the potential heat that can be generated from the fuel.
Other factors include access to a piece of land and its topography, Burd said.
“You start by picking the biggest apple first,” he said of the larger deposits with easy access to them.
Geography is a tremendous factor in when and where a company will drill a site.
Seismic readings or tests in a deep well in the area that may have already been drilled as well as other tests can provide needed information on a particular area, Burd said. Geologists will study formations and gather other information to determine potential sites.
“They will pick and choose the most lucrative,” Burd said.
The Wirt County Oil and Gas Group was formed in 2012 and has brought together landowners, mineral rights holders and gas producers to formulate a lease option for those interested in having their property used in natural gas production. The group’s acreage includes property in Wood, Ritchie, Calhoun, Roane, Jackson and Wirt counties.
Jim Lydon, chairman for the group, said they are in a prime area for natural gas extraction.
“We are in the Super Wet Area in both the Marcellus and Utica formations,” he said. “Companies can earn greater profits when they drill in the super rich zones.
“I would hope that would translate into larger pays for the farmers.”
Buckeye Royalties LLC held an informational meeting at Frontier High School recently for Washington County landowners about natural gas interests coming into the area. Officials from the company did not return a phone message seeking comment about what might be offered to landowners in prime areas for natural gas extraction.
Messages were also left with officials at Gastar and Drilling Appalachian that were not immediately returned.
An official with Northeast Natural Energy who was initially contacted could not be reached for further comment.