Lease for county home mineral rights

For some time, county lands have been desirable for oil and gas companies and on Thursday the Washington County commissioners agreed to lease the mineral rights for underground formations on about 265 acres around the Washington County Home to MNW Energy LLC.

MNW is expected to assign the lease to Protege Energy III, based in Tulsa, Okla.

Theisen Brock attorney Jim Huggins covered much of the wording in the lease to make sure that the county was protected as much as possible, he said.

“There is push back,” Huggins said. “They’re trying to get flexibility and loosen restraints; we’re trying to tighten them.”

Commissioners made sure to specify ways the county home wouldn’t be disrupted or disturbed through several distinctions.

“We’ve got three distinctions,” said commissioner Tim Irvine. “We said absolutely…no surface disturbances on about 90 acres (immediately surrounding the county home). They can go under that. On the big block of about 160 acres, we said go ahead and drill. On the narrow 15.5 acres (behind the 90 acres) we said they can put in a gathering pipeline only; nothing across the county or across the state.”

The land surrounding the county home was put up for a lease option with SGM Holdings Inc., a Michigan-based oil and gas company, in April. SGM was then supposed to assign the lease to locally based Reed Energy.

SGM only closed on around 1,000 acres in the previous deal, leaving between 6,000 and 7,000 acres free, which includes the land around the county home.

Much of the leasing process is similar to the April venture: as part of the landowners association known as the Caywood Group, the county will lease the oil and gas rights in underground formations beneath the county home and surrounding area.

The net lease amount has increased from $2,550 to around $4,735. The $4,735 takes into account a local attorney fee of about $15.

Huggins presented an oil and gas lease, memorandum of lease and a purchase and sale agreement (PSA). It was unanimously decided to enter into an agreement with MNW.

MNW has a threshold lease requirement to meet by Feb. 14. If about 6,100 acres aren’t leased by then, the Caywood Group representatives have the right to terminate all agreements.

“(Protege) has turned some deals in Southeastern Ohio; they’ve made some money and they’re ready to turn another deal,” Huggins said. “(Protege III is) a big program and is getting bigger and bigger.”

In other business, commissioners declined to increase Veterans Services Office board members’ wages from $5,500 per year to $7,200 per year, which is a 33 percent increase based on attending approximately 12 to 20 meetings.

The decision was made based on paying what’s fair and that longevity of service shouldn’t constitute a pay raise, they said.

The commissioners also approved Family and Children First supplying a desk for a Big Brothers, Big Sisters representative.

The Athens-based group will hire a Washington County representative by March.