×

Exploration expansion creates opportunities and challenges

Natural gas and oil producers remain committed to eastern Ohio as they crack the shale concealed in the Utica and Point Pleasant geological formations.

The economic rewards are detailed in the Ohio Natural Energy Institute’s report, “The Essential Facts on Essential Ohio Energy,” released last month. However, individual company earnings are not provided.

Almost 15 years ago, a Canfield law firm offered guidance on the burgeoning revolution in oil and gas leasing.

“During the summer of 2010, the oil and gas leasing situation in Ohio changed markedly,” Johnson & Johnson posted on its website in November of that year. “Prior to this point in time, oil and gas leasing and drilling in Ohio was conducted primarily by smaller, local companies.”

Exploration companies Chesapeake Energy, followed by East Resources, were the first to enter into leases with landowners, the entry continued. Once annual payments of $10 to $20 per acre jumped significantly.

“So there’s a lot of money for the landowners, if they are properly represented,” attorney Nils P. Johnson Jr. said.

Among the firm’s clients today is a western Columbiana County landowner group who owns about 5,000 acres. Johnson & Johnson is part of the legal network connected to the Utica and Point Pleasant shale plays.

“There’s a lot of tricks in signing oil and gas leases, and it’s generally better for them to band together,” Johnson said. “When you’re dealing with big oil companies, you’re dealing from a better position of strength rather than a guy who has a 40-acre farm and, you know, just doesn’t have the negotiating power.”

The institute’s report highlighted royalty payments issued among the natural gas and oil producers.

Ascent Resources, headquartered in Oklahoma City, Oklahoma, produced more than 40% of the state’s natural gas in 2023. It paid more than $1 billion in royalties since 2022.

JobsOhio, a private economic development agency, pegged overall royalties paid to landowners in a six-month period in 2023 at $763.8 million.

Johnson said industry advancements allow producers to expand their reach.

Fracking fluid, used in drilling, is one such example. The fluid, which Johnson referred to as the “secret sauce,” allows for natural gas and oil to be extracted.

“And the secret sauce, the magic formula, has improved greatly in the last dozen years,” Johnson said. “The track lengths now are about 13,000 to 15,000 feet long, as opposed to five or six (thousand). So the wells are much more prolific than they used to be.”

With greater expansion comes higher production.

“So wells in western Columbiana County … are turning on at 670, and 800 barrels a day,” Johnson said. “Production is actually better as you move south into the play, because the geology changes somewhat and the reservoir is better, but that’s a lot of production.”

State Rep. Tex Fischer, a Boardman Republican, serves on the Ohio House Energy Committee. He backs industry efforts to drill statewide.

“We want to put Ohio in a place where we can actually take advantage of the incredible oil and gas resources that we’re blessed with, particularly in eastern Ohio.”

Newsletter

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *

Starting at $2.99/week.

Subscribe Today