Record-setting Transfer Brings New Shale-Generated Revenue to Eastern Ohio
The Utica Shale has been the gift that keeps on giving for Ohio, and southeast Ohio in particular. Whether it’s new jobs created or tax revenue generated, oil and gas development has helped fill the coffers of local communities across the state in a number of different ways. Sometimes, these economic benefits come from unexpected streams — a welcome discovery for a number of county officials this week, as Belmont and Jefferson Counties became the beneficiaries of new, unexpected financial windfall from the latest land deal by Ascent Resources.
Ascent Resource’s purchase of almost $1.5 billion dollars of oil and natural gas assets represented the largest single-day transfer of assets recorded for both counties in decades. The company acquired a number of oil and natural gas assets from CNX Resources, Hess Corp., and Utica Minerals Development. The purchase included:
- Approximately 113,400 net leasehold acres
- 93 operating wells
- More than 380 gross incremental horizontal well locations and an increased working interest in more than 900 gross horizontal well locations
“This is the biggest transfer that I’ve witnessed in my entire career working here, and I do believe it is the biggest in the history of Jefferson County,” Jefferson County Deputy Auditor E.J. Conn told local Fox affiliate WTOV.
For Jefferson County, handling the transfer of $305 million in natural gas assets located within the county netted a $1.2 million dollar service return. The money, according to Conn, will be allocated in a 25/75 percent split:
“$1 will go into the GIS (mapping) fund and $3 go directly into the general fund.”
According to WTOV, the allocation structure allows for at least $750,000 to go to the county for the commissioners to allocate for Jefferson County needs, and supplements any decline in administrative revenue.
To put this figure into perspective, Conn noted the transaction “resulted in a conveyance fee larger than all of the conveyance fees we collected in all of 2017.”
Energy In Depth spoke with Congressman Bill Johnson (OH-06) – who represents the majority of the state’s Utica Shale counties in Washington D.C. – regarding the deal, with the Congressman noting the revenue represents only a part of the whole of the kind of effect the industry having in the state:
“This large asset transfer, resulting in a huge windfall for some Eastern Ohio counties, is yet another example of the positive impact the oil and gas industry is having on our communities.”
State Rep. Andy Thompson (R-Marietta), who represents Belmont County as well as Noble and Harrison counties (which are also home to assets included in the acquisition and benefitted from the transaction), also spoke with EID following the announcement, and highlighted what the industry and the revenue it has generated means for the area:
“This is another example of the vast support our area has received from the oil and gas industry. We are thankful for this and all other investments in the Shale Crescent area. They have provided record-setting benefits for workers, local governments and boosted the economy in our region. We look forward to more investment in our area for everyone’s benefit.”
Indeed, the region – one of the highest producing in the state – can expect more investments from oil and gas production. Ascent Resources is among a number of companies active in the Shale Crescent region, and their continued success in the Utica was the driving factor in acquiring these assets. As Jeff Fisher, Ascent’s Chairman and Chief Executive Officer notes, the acquisition marks a “milestone” for the company, and the Utica Shale holds great promise for its future, and the regions, with continued development on the horizon:
“The combination of these accretive bolt-on acquisitions is a milestone for the Company and has been made possible by our outstanding operational success in the Utica Shale… The acquired assets … further establishes the Company as a compelling Utica pure play and will significantly enhance the Company’s growth and equity value.”
As EID recently covered, the state’s oil and gas industry is on the rise, which is evident with the latest production numbers from the Ohio Department of Natural Resources. As oil and gas companies continue to have success in the Utica and Marcellus formations, we can expect more prosperity for the counties and communities in the years ahead, a fact Rep. Johnson noted in our conversation:
“Whether through creating jobs or adding revenues to local coffers, the energy renaissance we are witnessing is fueling an optimism not seen in a generation in Eastern Ohio. I believe there are many more positive developments still to come.”