MOUNDSVILLE , W.Va. – As part of the West Virginia Department of Commerce’s Mineral Development program, Noble Energy plans to drill under the Ohio River to extract oil and natural gas from 1,400 acres of state-owned land.
“Noble Energy’s revised bid was the highest bid for that property, and we currently are in negotiations with them,” Chelsea A. Ruby, spokeswoman for the commerce department, said
The tract is roughly six times larger than the 232-acre area beneath the river which Gastar Exploration plans to drill. Both tracts underlie the river in Marshall County.
Ruby said Noble agreed to give the state $3,500 per acre to lease the land, which would equal a $4.9 million payment for the deal. She did not specify the percentage of production royalties Noble will pay, but the department is asking bidders for 20 percent worth of the oil and natural gas the company pumps.
Together, these two deals will pay the commerce department nearly $6 million in lease money, in addition to potentially years worth of royalty payments, as Gastar’s deal would pay the state $812,000.
Noble spokeswoman Stacey Brodak said she could not comment on the deal, as it is not finalized.
Via its partnership with CNX Gas Corp., Noble maintains drilling operations throughout Marshall County. The company’s most recent earnings report shows the Houston, Texas-based company collected $419 million worth of income from July 1-Sept. 30.
The deal is one of several state officials are seeking for state-owned lands. Three of the bids outstanding are for land under the river. In addition to the minerals which Gastar and Noble agreed to extract, the commerce department’s website now shows the agency now seeking bids for the following tracts: two additional areas under the river in Marshall County; two additional tracts under the river in Wetzel County; 130.95 acres under Fish Creek in the Franklin District of Marshall County; 23.67 acres in the Greenbrier District of Doddridge County; and an unspecified number of acres in the Jug Wildlife Management Area in Tyler County.
These proposed fracking zones are also in addition to the $6.2 million bid Denver-based Antero Resources recently made for drilling on 518 acres at the Conaway Run Wildlife Management Area in Tyler County.
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