Struthers seeks mineral-rights bids


By jeanne starmack

starmack@vindy.com

struthers

Struthers City Council is looking for bidders for mineral rights under city-owned property.

At a special meeting Wednesday, the council approved an ordinance allowing the city’s safety- services director to advertise for bids.

Though other communities have not solicited bids for leasing mineral rights, Struthers Mayor Terry Stocker said the city’s law director advised them to do so.

“We felt it might take a little longer, but we wanted to go by the law,” he said Friday.

He said Hilcorp Energy, which recently signed a lease with the city of Campbell, also approached Struthers.

He said Hilcorp’s representative first offered the city a $5,000-an-acre signing bonus for what would be between 100 and 150 acres. Hilcorp also offered 20 percent royalties from natural-gas wells that are producing. When the city contacted the company a second time, Stocker said, the offer had dropped to $4,000 an acre and 18 percent royalties.

Hilcorp is seeking leases for mineral rights so it can extract natural gas through a process called hydraulic fracturing.

Hydraulic fracturing, or fracking, involves digging a vertical well thousands of feet down into a rock formation called the Utica Shale, then drilling horizontally through the shale. After the drilling, millions of gallons of fluid are forced into the shale to crack it and extract the gas there.

Hilcorp and Campbell signed a lease for mineral rights under 167 acres of city-owned property in July. The city will receive an $836,000 signing bonus and 20 percent royalties.

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