Oil discovered on one Clark County farm has a company seeking more lease agreements with nearby landowners in hopes of uncovering additional oil-producing sites.

West Bay Exploration, the Michigan-based drilling firm searching for hidden oil deposits in the Miami Valley, discovered oil about 1,700 feet deep at a Pike Twp. soybean farm owned by Bob Suver and relatives along Detrick Jordan Road this summer. The Suvers were the first in Clark County to sign a lease with the company last year.

Karen and Randall Walton of Pike Twp. signed a five-year lease with the company in January, and 23 property owners in neighboring Miami County have reached agreements with the company since late November 2011, according to a Springfield News-Sun review of county recorder’s offices.

Jim Weymouth, who owns a 35-acre farm along Detrick Jordan Pike, said he and others in the community were first contacted by the company a year and a half ago. He said a representative knocking on doors in the area has offered numerous deals that appear to have sweetened in recent months.

“I’m up in the air on it. I’ve talked to area farmers about it, and a lot of people are up in the air on it,” said Weymouth, adding he is more focused on harvest than leasing his property. “I want to find out what all it entails.”

A standard agreement with the company could result in a financial boon for local landowners, who could earn minimum bonuses starting at $50 per acre and royalties of one-eighth from oil production. The agreements are negotiable.

The economic impact for the county if more landowners sign leases is unclear, though West Bay officials have hired staff for further exploration of the first oil discovery.

A statewide study, however, shows growth in Ohio’s oil and gas production from the Utica Shale could result in the creation or support of almost 66,000 jobs by the industry, and generate $1.7 billion for Ohio’s economy this year, $5.8 billion next year, and nearly $10 billion in 2014.

The oil discovered in Pike Twp. is not from the Utica Shale, but instead from the Eau Claire formation and the Knox dolomite, which is a combination of sandstone, limestone and sedimentary rock that is about 2,300 feet deep and is found in Ohio, Indiana and other Midwestern states, according to state and local geologists.

West Bay Vice President Pat Gibson declined to provide more information about the formation but said the oil found in localized pockets unlike the tons of oil found in eastern Ohio in the Utica Shale.

“It’s not part of the Utica Shale. It’s something a little deeper than the Utica Shale is. It’s a bit confidential. It’s a pretty competitive business, and our scientific advantage is a part of our competitive advantage as well,” Gibson said.

The notion of finding oil in southwestern Ohio had seemed far-fetched; there had been little success in the area in last 100 years. Oil and gas wells were discovered in Pike Twp, New Carlisle and South Vienna in the 1800s, then again in 1985, but they weren’t significant.

West Bay used seismic readings to determine potential oil on the Suver farm. The new technology and the discovery of oil there indicate a potential for untapped deposits in the region that could result in up to 100 leases nearby, Gibson said.

“The main technology is geophysical technology … That technology has definitely helped in identifying some deposits of oil that may be smaller than what people would have been able to identify in the past,” Gibson said.

West Bay is using traditional or conventional drilling and not the controversial fracking technique, which a 2011 U.S Environmental Protection Agency study said was to blame for groundwater pollution.

Gibson said it is unknown how much oil the Suver property could produce, but added that the company would consider a well that produced between 15 to 20 barrels per day a success.

In October, workers sent sound waves into the ground to gather underground images along public right-of-ways in Montgomery, Preble, Miami, Greene and Clark counties to see whether further examinations and drilling would be worthwhile.

The oil and gas well in Clark County is the only one the company has discovered, Gibson said, adding that officials will know how productive the well is in about a month.

Negotiating Leases

Local landowners who are considering signing lease agreements with a company should seek legal advice, area landowners and attorneys said.

Christopher Walker, a Dayton attorney who helped negotiate two oil and gas leases in the Miami Valley, said initial lease agreements are typically heavily favored toward drilling companies.

“It’s really important to get advice to make sure their interests are protected,” Walker said.

Walker has practiced law for 24 years and specializes in EPA issues. He said he’s among only a few attorneys in the area who has handled oil and gas leases because the issue has been almost nonexistent in southwestern until 2011.

The signing bonuses and royalties on an initial lease are negotiable, Walker said.

“In my experience, the Miami Valley area leases are not commanding the same kind of premiums as properties east of Columbus,” he said.

Other issues residents should consider is whether the lease should allow fracking on their property and requesting the drilling company to conduct water sampling before and after drilling occurs on their property because contamination can occur if oil wells are not properly constructed, he said.

Environmental Concerns

Wittenberg University geologist Mike Zaleha said oil drilling can be done without causing environmental problems if precautions and safety standards are followed.

“I think it can be can be a good thing,” Zaleha said.

But Earthworks, a nonprofit environmental watchdog organization based in Washington, D.C., released a study last week that reveals states nationwide fail to enforce oil and gas development regulation.

The yearlong study examined enforcement data and practices in Ohio, Pennsylvania, Texas, New York, New Mexico and Colorado.

According to the study, more than 90 percent of Ohio’s more than 58,000 active wells go uninspected and companies that are found in violation of regulations are rarely penalized.

“Ohio’s enforcement of state oil and gas rules is largely broken,” Earthworks’ Senior Staff Attorney Brus Baizel said in a written statement.

Nadia Steinzor of Earthworks said

the lack of oversight can impact air and water quality as well as the health of residents who live near wells when inspections aren’t carried out and when companies are violating environmental standards.

She said residents living near drilling locations should be concerned about direct impacts on air and water quality as well as health problems that can follow as a result of spills and improper waste disposal.

While West Bay is not using hydraulic fracking, a horizontal drilling technique that goes deeper and uses more water, chemicals and equipment, Steinzor said there is concern for all drilling.

“There’s absolutely problems with all types of modern drilling, including vertical drilling. a lot of the issues we’ve seen out west like in Wyoming and Colorado that started years and some cases decades ago were the result of spills, leaks, migration of fluids into aquifers and water wells happened with conventional drilling,” Steinzor said.

Jobs vs. Safety

Zaleha and Steinzor said oil and gas production in Ohio can occur through drilling, but both stressed that safety measures cannot take a backseat in favor of growth growth.

Steinzor said job creation numbers associated with oil and gas production continue to be debated as some say the numbers have been inflated.

Still, she said Ohioans should not have to choose between economic development from oil and gas production and environmental safety.

“We need to find a way to have both. If we are going to drill we need to drill right and we need to make sure it’s done safely,” Steinzor said. “There’s really no excuse for sacrificing human health and air and water quality in the name of job creation. Ideally we can do both … It’s wrong to put one against the other.”