MWCD approves sale of water from two Ohio lakes for Utica shale drillers

By Bob Downing, The Akron Beacon JournalMcClatchy-Tribune Information Services

April 22--The Muskingum Watershed Conservancy District on Friday approved two deals with Utica shale drillers for water from Seneca Lake and Clendening Reservoir.
The first deal calls for the district to provide up to 184 million gallons of water from Seneca Lake in Guernsey and Noble counties to Colorado-based Antero Resources.

The district will sell up to 2 million gallons a day for up to three months. The drilling company holds about 20 Utica shale permits near Seneca Lake.
Under the contract, the company will pay $6 per 1,000 gallons from May through July. That price is 50 percent more than Antero now is paying for raw water, the district said.

Seneca Lake water will be used with other sources to create a private water system for Antero and its operations. That system is expected to cost $50 million to $60 million, according to information the district provided.  The system will include the creation of about 10 water-storage facilities connected by pipelines.
Antero's agreement calls for cutting off withdrawals if the lake level drops too low.

The Muskingum Watershed Conservancy District also approved a separate deal with Oklahoma-based Gulfport Energy Corp. for up to 25 million gallons of water from Clendening Reservoir in Harrison County.
Gulfport will pay $8 per 1,000 gallons in the deal that runs through June 12. Its agreement calls for water withdrawals to be halted if the lake level drops below a certain threshold.
The company needs the water to hydraulically fracture, or frack, two of its Utica shale wells in Harrison County.

Last February, the district approved a $40.3 million natural gas lease with Antero for 6,500 acres at Seneca Lake. The district will be paid a leasing bonus of $6,200 per acre plus a royalty of 20 percent on natural gas, oil and natural gas liquids from Antero wells under district-owned land.

Earlier, the district had approved two other natural gas leases: in 2011 with Gulfport Energy at Clendening Lake and in 2012 with Chesapeake Energy Corp. for land at Leesville Lake in Carroll County.Gulfport paid the district a $15.6 million lease bonus on 2,800 acres and royalties on natural gas produced. Chesapeake paid the district $21.5 million in lease bonuses on 3,700 acres plus royalties.

Stretching from Akron to the Ohio River, the district covers 14 reservoirs and dams in 18 counties.

Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com.