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BP’s $331M investment in Trumbull will spur growth in Ohio, leaders say


Published: Wed, March 28, 2012 @ 12:05 a.m.
Download as PDF:
ALOV Trumbull Group Lease

Copy of the ALOV Trumbull Group Lease, including comments regarding negotiated terms.

By Karl Henkel

khenkel@vindy.com

YOUNGSTOWN

BP’s $331 million investment in the Mahoning Valley will have a “tremendous impact” on jobs and economic development in Ohio, a company official said.

Tim Harrington, regional president of BP’s North America Natural Gas business, said Tuesday he sees “great benefits” for the London-based company and for Ohio after BP confirmed it leased 84,000 to 85,000 Trumbull County acres — about 20 percent of the county — for Utica Shale exploration.

“It gives us a foothold and gives us some leverage of scale,” he said. “That’s what we looked for.”

Harrington did not speculate on the profitability of BP’s acreage, saying the company will know few details until its “first well is in the ground.”

Harrington did not say when BP will begin exploring its new acreage.

The original lease is for five years with the possibility of an extension based on operations, particularly drilling units. A copy of the lease is available on Vindy.com.

In Trumbull County, municipal leaders believe the deal is good news as long as drilling is done carefully.

“Any time we have an infusion of cash like that, it’s good for our citizens,” said Fred Hanley, a Hubbard Township trustee. “This is totally a godsend.”

Girard Mayor James Melfi said the deal will be a boost to the local economy, allowing residents to buy more services and goods.

“It’s a very prosperous day for all the landowners, the shareholders and the county,” he said.

Pat Ungaro, Liberty Township administrator, said the positives from the deal are “overwhelming.”

Ungaro said the industry will bring more people to the Valley for work, which will improve housing values.

But he also questioned what would happen if there was groundwater contamination.

“How can you market the property if that happens?” Ungaro said.

Trumbull County Commissioner Frank Fuda says the agreement means a lot of property owners will have extra money to use for purchases, such as equipment.

“This is great news,” Fuda said. “Presumably the farmers will spend some money on trucks and those types of things, which would be great for the local economy.”

He added that with Consol Energy/CNX prepared to begin drilling in Vienna Township within the next six weeks, it’s likely that other economic investment will come to the county soon as well.

“Certainly it’s a big shot in the arm,” fellow Commissioner Dan Polivka said of the BP agreement.

The lease, according to landowners, also has a provision granting them 17.5 percent of mineral values.

Though geologists say it is too early to estimate how much gas and oil the Utica Shale contains, the Ohio Department of Natural Resources estimates the Utica Shale may hold as much as 5.5 billion barrels of oil and 15.7 trillion cubic feet of natural gas.

Though BP confirmed the deal, landowners will wait until the week of April 10 to sign.

If at least 75 percent of the landowners sign the lease, BP is bound to accept the terms. If fewer than 75 percent sign, BP has the option to pull out, according to a source familiar with the situation.

About 95 percent of the 67,103 acres represented at a special meeting Monday voted for the deal; 344 represented acres opposed it.

BP declined to confirm monetary or lease-agreement terms.

The Vindicator on Tuesday reported per-acre bonus payments will be $3,900, infusing about $331 million into the local economy.

The approximately 85,000 acres owned by about 1,800 landowners is the largest single-county pool of leased land in state history, said Bob Rea, president of the Associated Landowners of the Ohio Valley, a nonprofit landowner-advocacy group that negotiated on behalf of the landowners.

That acreage, however, could fluctuate downward as approximately 3,000 represented acres abstained from voting at Monday night’s meeting.

Abstentions from voting on lease deals can occur when there is potential disagreement regarding previous mineral-rights leases.

Contributors: Staff writers Ed Runyan and Robert Guttersohn


Comments

1juanita1944(34 comments)posted 2 years, 5 months ago

dear god not again.......sad look.......here we go again.....what the hell is the matter with these people in charge.......holy jumped up jesus........another area with contaminated water..........ground.......sickness.......do these officials.......live on these properties...........?hell no but they want others to get sick.....is it not gods plan to have water seep up to the surface for us to use and drink........do they own the bottled water companies? i cry for our future......our children ..our land...when all is unusable...look to me for an i told you so...please people check other places that bought into this madness...read what they put in the ground..ask questions...remember this is a waste product they are putting in our ground...this is not drilling for oil...this is forcing dirty chemicals into our ground....i read what they put in the soap we use for our clothes...do we need to drink it?...stop this madness bp is british petrolium,,,this is stuff from a company that charges more for us to buy our gas do you want britain to own us again....?please think this out...i know we need money but do we need the garbage they will be putting our earth....the poisons?god save us......i know how to eat less and do without 100 shoes..mine are cheap ones...can we not lower our sights on lesser things........our forefathers did to build america.......why must we destroy it now...?i cry for our future children......god help us against these greedy people..that want us to die with the junk they are putting in the earth you gave us to protect....thank you god and please bless me....i'm afraid of dieing with all this stuff

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2DwightK(1255 comments)posted 2 years, 5 months ago

If you don't have a trade, get to school now. it would be a shame to miss out on a good opportunity like this.

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3Ytown20(118 comments)posted 2 years, 5 months ago

This gas is going to be EXPORTED on the international market the highest bidder. How does this end our dependence on foreign energy sources? It isn't to keep this energy here at home, it's obviously going to sold to Europe and Asia where it will be bought for double and triple the price. Google fracked natural gas exportation.

Doesn't it make anyone upset that our property values are potentially going to plummet and we all are risking water contamination so that our resources can be exported? Why isn't any of this information being brought up to landowners in our area?

Seems everything has to be fast fast fast, hurry up and sign, just do it, everyone else is, your neighbors have probably already have, if you don't sign, they'll frack anyway, nothing will happen, we promise. None of this settles well with me.

Certainly anything obtained cheaply is not of value and all that glitters is not gold.

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4Ytown20(118 comments)posted 2 years, 5 months ago

Dwight: Fracking is a boom and bust industry. It will be over and gone leaving us with the mess to clean up before anyone learns a trade. Besides, if you dig a little deeper, you'll see the hope of jobs is not much more than a fairytale.

PA which is in full fracking mode, and according to the Penn State (funded by oil & gas), there were going to be 200,000 jobs attributed to fracking, however the Bureau or Labor Statistics accounts for a mere 4000 and change in the oil and gas industry. Which I believe even went on to state most were workers from out of state. I can't remember off the top of my head.

Not sure I'd want to dump tuition money into this trade.

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5UticaShale(854 comments)posted 2 years, 5 months ago

Hell yes, stop all this wanton contamination! Follow me! stop using natural gas to heat your homes I tell you, we can all stop fracking by using wood to heat our homes, Yes! it only takes an acre of denuding for one winter to heat our homes. And say no to OIL! follow me as I ride my bike everywhere and throw my car away, yeaaaaaaaaaaaaaaaaaaaaaa STOP FRACKING NOW!

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