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Is Area Hot Spot for Oil, Gas?


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Is Area Hot Spot for Oil, Gas?

It's not just coal that's being removed from the West Virginia hills. Representatives from Chesapeake, Marathon, Magnum and Crown are trying to convince Randolph County land owners to lease their properties' mineral rights.

Just how much money people are being paid for the leases, however, is a creating a bit of confusion.

Clarence Arbogast is one land owner who has been offered money for the mineral rights to his more than 100-acre property in the Beverly District. Arbogast says he believes that there are some county residents who are not receiving a fair price.

"They're getting beat and beat bad," he said.

According to Arbogast, different companies will compete with each other for the mineral rights. At least two have tried to outbid each other for his property, he said, and the value per acre has continued to increase.

Arbogast was originally offered $5 per acre of land and 12.75 percent royalties, an offer he refused. Since then, he has been offered as much as $500 per acre and 18.5 percent royalties.

Although selling mineral rights is up to the owner, Arbogast said he hopes people do not take the first offer, especially for low amounts of money.

"It's not crooked. People just need to know," Arbogast said.

He also believes neighbors should pool their property and lease the different tracts to one company. More acres together, he said, will likely bring more money per acre.

Mineral rights are signed to one company, and after a certain number of years - which is determined in the individual contracts - the owner will retain mineral rights, according to Arbogast.

The leases Arbogast said he is considering will allow him to retain surface rights to his property, meaning he can go onto the property at any time. However, when a company purchases the mineral rights, he said its representatives will also have access to the property at any time for mineral exploration and maintenance of drilling equipment.

Arbogast advises that anyone considering an oil and gas lease should consult with an attorney and read the contract carefully.

While mining for West Virginia's coal has existed for more than 100 years, according to Dr. Kashayar Aminian, a West Virginia University College of Engineering and Mineral Resources professor drilling for oil and gas is not necessarily new to the state. Increasing gasoline prices, he said, have prompted companies to reconsider the Mountain State for those commodities.

The Appalachian Geological Basin, which ranges from New York to Kentucky and includes West Virginia, was some of the first area in the United States to produce oil, according to Aminian.

It is likely, he said, that many of these companies have researched the land they hope to lease for mineral probability.

Most previous gas and oil drilling did not go below 6,000 feet. Aminian said exceeding that point, however, increases the potential for locating minerals.

More information about the leases will be discussed during a meeting at 6:30 p.m. Friday at the Holiday Inn Express in Elkins. The West Virginia Farm Bureau and West Virginia Surface Owners Rights Organization are sponsoring the meeting, which will provide information to those who have and have not signed an oil and gas lease and those who do not currently own their property's mineral rights.

For more information about the meeting, call 1-800-398-4630.

Post Wed Jul 09, 2008 12:01 pm 
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