The Herald, Sharon, Pa.

Local News

October 25, 2012

Board favors oil, gas lease

By Sandy Scarmack Herald Staff Writer

MERCER COUNTY — Acknowledging that the county may be a little north of the “sweet spot” of  the oil and gas boom, Mercer County commissioners plan to vote this morning on a deal that could eventually allow drilling on Munnell Run Farm, the Mercer County Cooperative Extension property, and land at Interstate 80 and U.S. Route 19, locally known as “the gravel pit.”

Commissioner Chairman John Lechner said Wednesday the county has been pursuing options with several companies regarding the leasing of oil and gas rights on county-owned property. Pending title searches and a review by the county solicitor, they may lease 485 acres to Hilcorp Energy of Houston, Texas, for $3,250 an acre. If gas is drilled from any of the properties, the county would receive an additional 17 percent in royalties, Lechner added.

The lease would include the rights on the Mercer County Jail property in Findley Township and on 33 acres in Lake Township. Lechner said the jail property is too small to accommodate a drilling pad and the property in Lake Township is likely a dam or waterway and unsuitable for drilling.

“The title searches haven’t been done yet. We’ve done just a quick check,” he said.

Lechner also cautioned that any money realized from the leasing won’t be available until next year, at the earliest, and won’t have an impact on the upcoming budget. “Depending on what the title searches show, we may get zero to the maximum,” Lechner said. Because he has no idea how long the process will take, he said, there is no way to count on the money for next year’s budget.

At most. if all the land is cleared through the title searches, the leases would bring $1,413,750.

“All the oil companies are focusing on that sweet spot in southwestern Mercer County and over into Ohio. Depending on what’s underneath our ground, they’ll probably go for the oil first, the wet gas next and the deep dry gas last. So we’re probably looking at drilling that is maybe 25 years out,” Lechner said.

The contract up for review today is a five-year lease.

Lechner said he is hopeful drilling could be done at the “gravel pit” at I-80 and Route 19. “The royalties alone would more than cover the cost of that investment and that land could finally start paying for itself,” he said.

The county will receive some $98,000 from the state’s impact fee related to drilling but Fiscal Director John Logan said he didn’t yet know the regulations regarding spending the money. “I know there are some requirements about greenways and conservation efforts,” he said.

 

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