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Utica Shale Frack Water Agreement in Columbiana County OH

by Kenneth E. DuBose on July 28, 2011

East Liverpool, OH, is preparing to enter an agreement to sell water for use in hydraulic fracturing. This is another sign of increasing oil & gas activity in the Utica Shale and in Columbiana County, OH. Neighboring areas are also garnering industry investment.

The article also mentions the sell of mineral rights helping fill the budget gap for East Liverpool next year. Be watching to see what price the acreage is sold for. Public entities usually hire professionals and have standard terms that allow them to get higher prices than individual landowners. It will be a good indication of what is to come if it is sold at a lofty land price.

The city may enter into a contract with LBG Land Services, Inc. to sell the company bulk water. According to the contract terms, LBG would agree to pay the city $5.93 per 1,000 gallons of bulk water. Dedicated meters, purchased at LBG’s expense, would monitor the water usage.

The agreement is for an initial two-year term and will automatically renew on an annual basis thereafter unless either party terminates the agreement via a written notice not less than 60 days from the end of the initial term or any renewal term.

The committee added a line item reflecting $491,071 in additional revenue to balance the tax budget.

According to Kim Woomer, committee head, the money will be generated from the expected sale of mineral rights on city-owned property.

“That’s only half of what’s coming from mineral rights,” Woomer said.

Read the full news release at reviewonline.com

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