LISBON -Columbiana County commissioners doubled their money under a new shale gas lease that has finally been approved.
Commissioner Chairman Mike Halleck reported at this week's meeting he had signed a lease agreement on behalf of the board with DPS Penn for $5,850 an acre, compared to the $2,700 figure they originally agreed to last August.
The county will now receive $3.2 million, but $1.5 million of that is going into an escrow account to help the Buckeye Water District (BWD) pay the $4.8 million-plus court judgment it owes the city of East Liverpool.
The lease with DPS Penn, an agent for Chesapeake Energy, is for 548 acres instead of the original 568 acres of county property after 20 acres were removed because of title problems and other issues.
The county would also receive 20 percent royalties on any gross revenue received should drilling occur under county property, and the lease is for three years instead of the standard five years, "so we can possibly get another bite of the apple," Halleck said.
The $5,850 represents the highest lease fee paid to any government body to date by $50.
Last August, commissioners approved a letter of intent to sign a lease with DPS Penn for $2,700 an acre for 568 acres of county property and 17.5 percent royalties. Commissioners never signed the lease, however, and three months later East Liverpool filed a lawsuit seeking access to any lease money received by the county to help recover what the city is owed by the BWD. Commissioners were a defendant in East
Liverpool's lawsuit against the BWD because the county once operated the water district that later became the BWD.
After commissioners agreed to put up $1.5 million to help the BWD pay what it owes East Liverpool, the city dropped the lawsuit against the county. The BWD has agreed to repay commissioners if it uses the $1.5 million to compensate East Liverpool.
So what do commissioners intend to do with the remaining $1.7 million after it is received? Halleck said they will begin having those discussions, "but first and foremost I would like to see a rainy-day fund instituted in this county again."
Halleck was referring to a fund created during his first term in the 1990s when commissioners set aside unspent revenue in a special fund to use only in emergencies or for special projects.
"We did that years ago and it came in handy," he said, adding some of the money may have to be spent to pay higher-than-expected claims under the county's self-funded employee health insurance plan.
Although commissioners gave Halleck authority to negotiate and sign the lease, the board voted at Wednesday's meeting to officially enter the agreement into the meeting minutes.
The county is also in line to receive additional shale-related money for entering into an easement agreement with a midstream company wanting to run a pipeline across county property.
Just as they did with DPS Penn, commissioners authorized Halleck to negotiate an easement agreement with Cardinal Gas Services LLC of Oklahoma City, which wants to run a pipeline under the county farm property in Center Township, which is where the jail and dog pound are located.
This represents the next stage in the shale gas boom under way in the county, as midstream companies hired by drillers seek easements from property owners for pipelines to transport natural gas coming from local wells.
Although Halleck did not have all of the details, he said Cardinal would pay them an easement fee for every foot of pipeline, which is about 6,000 feet. The easement would be for a 50-foot wide right-of-way, and the pipeline would be buried at least three feet deep.