Oil leases rising in Clark County

Michigan drilling company secures rights on 20 properties in western portion of county.Farm Bureau says many members have been contacted about possible oil exploration.

Clark County Farm Bureau Director Mandy Havenar said many more farmers have been approached to sign contracts with the company, West Bay Exploration.

“They’re knocking on a lot of doors,” Havenar said.

The growing interest in potential wells in Clark County follows a statewide trend. The number of oil and gas permits issued in Ohio is up 16 percent since 2009.

The Ohio Department of Natural Resources issued about 860 oil and gas permits last year, compared to about 740 in 2009, ODNR officials said.

So far this year, ODNR has already issued 265 permits, officials said.

Most oil wells are found along the Utica Shale, thousands of feet below the eastern and central parts of the state.

But oil discovered in Clark County has been found in the Eau Claire formation and in Knox dolomite, which is a combination of sandstone, limestone and sedimentary rock found about 2,300 feet deep in Ohio, Indiana and other Midwestern states, according to state geologists.

“We have a lot of production from the Knox in Morrow County and in eastern Ohio, but we haven’t had much production in southwestern Ohio. There just hasn’t been much drilling in Clark County,” said Ron Riley, a geologist for the Ohio Geological Survey.

Attempts to find oil in the Eau Claire formation and in Knox dolomite in Clark County have been common since the 1800s, but those have yielded insignificant results until recently.

West Bay officials say new technology — for example, seismic readings used to find potential oil producing sites — has shown promise in western Ohio and Indiana.

Drilling began on a family soybean farm along Detrick Jordan Road last year and at one time produced 40 barrels of oil per day, said Bob Suver, who owns the farm along with other family members. The amount has since dropped to about five barrels per day, Suver said.

West Bay Vice President Pat Gibson said findings at the farm are encouraging and are about what the company expected.

“Initially it produced 10 barrels per day, but that hasn’t continued. It’s going to take months to understand the possible reserves of that well,” Gibson said.

“There hasn’t been any production in that area in a long time. Some wells were drilled 70 to 80 years ago,” he said. “We’re taking it slow.”

West Bay signed a two-year lease with Suver and other family members in 2011, and Karen and Randall Walton of Pike Twp. reached a similar agreement in 2012. Another 20 property owners also signed leases with the company last year, according to the Clark County Recorder’s Office.

Gibson said his company currently has no plans to seek additional leases and only has a drilling permit for the Suver farm.

“We’re comfortable with the amount of leases we have. We’re still in the testing phase on the Suver property,” Gibson said.

Riley said records submitted to the state show the Suver family farm produced 303 barrels in 44 days last year.

He said it’s too early to tell if the site will be a commercial well based on current production levels but said five barrels per day is considered a low-producing well.

“It’s not a lot, but the fact that they’re finding oil out there in that part of the state is encouraging,” Riley said.

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

Horizontal wells involve a process in which millions of gallons of water mixed with chemicals and sand are injected down wells to break apart shale and free trapped oil and gas.

A team of researchers estimated in a 2011 study that the average cost of drilling a horizontal well in the Marcellus shale in Pennsylvania is about $7.6 million.

Gibson said wells West Bay has drilled in Jackson County, Mich., using the traditional technique costs about $1 million.

By comparison, Gibson said traditional drilling in western Ohio or on the Suver family farm, for example, cost a few hundred thousand dollars because it’s shallow.

Havenar said the local farm bureau has offered area farmers two information sessions about oil and gas contracts and plan to have another for members in May or June.

She said the bureau provide members with the names of lawyers who can help review oil and gas lease deals and attempt to address concerns such as the impact drilling could have on property values.

She said the bureau remains neutral on the issue of drilling.

“We more or less want to educate them about the process. The farm bureau is a proponeent of renewable energy, but we want our members to base their decision on their farm and their family,” Havenar said.

The Suver family has leased 70 acres of the property to West Bay, but the company currently only has a drilling permit for about 10 acres.

Farmers who sign oil leases are provided with an upfront payment for the lease and royalties from the oil production, Suver said.

“Wells in eastern Ohio are producing 1,000 barrels per day. This one isn’t too much, but it’s something for this area,” Suver said.

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