Monday, April 23, 2012

AEP Leases Mineral Rights for The Wilds

From the Zanesville Times Recorder:

CUMBERLAND -- Giraffes, rhinoceroses, cheetahs and ... horizontal drilling rigs?
That soon might be the case at the Wilds, the 10,000-acre nonprofit conservation and research facility in Cumberland.
The Wilds sits atop land owned by American Electric Power, and in the fall, AEP leased the mineral rights to Houston-based Anadarko Petroleum Corp. It was part of a larger deal that gave Anadarko rights to 150,000 acres of AEP land in southeastern Ohio, said Pat Hemlepp, an AEP spokesman.
Financial terms of the agreement were not disclosed.
As far as Anadarko's specific plans for the Wilds, those details are a little fuzzy, too. Company representatives have been in talks with Wilds representatives, but Anadarko doesn't have any firm plans in place, said Brian Cain, Anadarko spokesman.
Currently, Anadarko has only two permits for Utica Shale wells in Muskingum County, both in Meigs Township, according to Ohio Department of Natural Resources records. The company's only operational well in the county is off Paisley Road, just outside the Wilds.
"We certainly recognize the unique environment and considerations that must be made to protect the animals and preserve the plant life and area," Cain wrote in an email. "As a matter of practice, any plans to access the resources would be done in a cooperative and transparent manner with the Wilds."The Wilds is built on 10,000 acres of reclaimed strip-mined land. AEP donated the land to the conservation center in 1986, Hemlepp said, but even before that, the mineral rights were leased to the Marietta-based Artex Oil Co. Several conventional oil wells already are on the property, Hemlepp said.
Lately, however, the excitement has all been about Utica Shale, and Anadarko has more experience in Utica drilling than Artex, Hemlepp said. So, Artex approached AEP to ask if it would consider a lease transfer, Hemlepp said.
Under the new agreement, AEP would not get any bonus payments but will receive royalty payments for any development on the property.
Artex would have received the bonus payments.
"The important thing to remember is AEP has been involved with the Wilds now for more than a quarter of a century," Hemlepp said, adding that AEP has poured more than $1 million into the site. "It's a site that's very important to us. Obviously, we would not do anything that we would consider detrimental to the Wilds."
Hemlepp is unsure what drilling at the Wilds might look like, but AEP does have to right to review, and even refuse, well-pad locations, he said.
Anadarko likely will be able to reach much of the shale using directional and horizontal drilling from rigs outside the Wilds or on the perimeter of the property, he said.
Dale Schmidt, CEO of the Columbus Zoo and Aquarium, which runs the Wilds, didn't learn of the lease transfer until a few months ago, he said. For him, it doesn't matter what it is -- a plane flying overhead, atruck driving by or a drilling rig -- anything that might affect the animals gets his attention, he said.
"We're always concerned about our animals' safety and their well-being and how it will affect them. It doesn't matter if it's in Columbus or Zanesville," he said.
Some concerns specific to drilling include lights or noise from the rigs, which normally are operated 24 hours each day, Schmidt said.
So far, however, communication between the Wilds and Anadarko has been open, Schmidt said, and he plans on continuing down that path.
"As they get more into deciding what they're going to do in the state and at our site, we'll find those things out," he said. "We'll just continue to talk with them ... and learn more about their process and their procedures."


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