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Economy and Business


Major round of re-leasing unlikely in Ohio
Billions have been paid so far in Ohio for initial leases
by WKSU's TIM RUDELL


Reporter
Tim Rudell
 
natural gas well in Stark County
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In The Region:

Oil and natural gas drilling leases often terminate or are renegotiated if there’s no progress toward creating producing wells on the property during the lease term—typically three or four years.  For economic and other reasons millions of acres in Ohio’s Utica Shale play remain undeveloped -- with leases coming due. WKSU’s Tim Rudell reports on whether that means another big payday for Ohio landowners, or something else.

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Billions of dollars worth of oil and gas leases have been signed in Ohio since 2009. And, expiration dates are rolling up on many early ones -- where there’s been no drilling. Re-leasing is an option for energy companies, but that could be expensive.  And they may not need to. 

A lot of locations have proven non-viable for drilling so they don’t want those anyway.  Then there’s a move some companies are making of filing papers at the last minute saying a property is being folded into a development unit where drilling is taking place—that in, legal terms, will “hold the lease by production.” And, in our part of Ohio, attorney Alan Wenger says there’s another wrinkle.

“A large portion in the northern counties were already leased for conventional wells.  And the horizontal drilling companies took the assignment of deep rights from those older leases, already ‘held by production’ by the conventional wells. So they go on and on and on, as long as the conventional well is here.”

So a wave of new lease payments across the state is unlikely.  But new lease filings are reportedly brisk in the counties just south of our area.
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