BP to sell oil and gas leases in the Valley - 21 News Now, More Local News for Youngstown, Ohio -

updated

BP to sell oil and gas leases in the Valley

Posted: Updated:
WARREN, Ohio - Another energy company says it will discontinue gas and oil exploration in Trumbull County and other nearby areas in Ohio.

In reporting first quarter results, BP announced on Tuesday that the company has decided not to proceed with the development of Utica shale assets in Ohio.

 During a conference call with BP executives this morning., BP Chief Financial Officer Brian Gilvary said, "As a consequence of disappointing appraisal results, we have  decided not to proceed with development plans in the Utica shale. As a result, we have taken a $520 million expiration write-off relating to Utica acreage in the quarter."

Curtis Thomas, BP Director of Communications and External Affairs, Curtis Thomas told 21 News that BP launched an appraisal of the Utica region in Ohio, leasing 105,000 acres in several counties, 80,000 in Trumbull. Out of the eight wells drilled, four are producing,  Based on results of the appraisal, Thomas says that the results do not fit the BP business portfolio.

However, Thomas says that just because the results don't fit the BP portfolio, it doesn't mean those results would not be good for someone else. He says that BP will immediately begin marketing the acreage to other energy companies, by putting the leases up for sale.

"I would assume that some of those leases are on the various exchanges and market places that these companies look at now," Alan Wenger says, a Youngstown area attorney.

Wenger has extensive experience working with mineral rights and land leases. He says the majority of BP's leases were obtained in 2012 and most last about five years. Wenger says BP paid an average of almost $4,000 per acre in many of its lease agreements and it's possible those leases could expire before another company decides to drill.

In order for Trumbull to see drilling success, Wenger believes new drilling techniques need to be developed. 

"Technology could change to allow the type of rock that exists there, to be more economically feasible to develop," he says.

Commissioner Frank Fuda believes Trumbull County will eventually play a role in the shale boom, just not this year.

"I don't think they invested that much money thinking that it was going to be a complete flop," Fuda says. "I think they're confident they're going to be able to sell what they have and recoup their money."

Fuda says BP contributed to the community, by donating money to local groups and its leasing contracts provided local farmers with much needed money, which was spent on their farms and equipment. 

According to a map provided by the Ohio Department of Natural Resources, the Utica shale region includes several counties in eastern Ohio, including Trumbull, Mahoning and Columbiana.

The announcement from BP comes nearly two months after the Houston-based Halcon Resources announced that it had no plans to drill in northern Trumbull County this year.

Other drillers such as Chesapeake Energy continues operations in the valley, with the majority of wells in Columbiana County and in counties south of that area.

  • More From wfmj.comMore>>

  • 1 of 2 Ohio plane crash victims not yet identified

    1 of 2 Ohio plane crash victims not yet identified

    Monday, July 28 2014 9:48 PM EDT2014-07-29 01:48:43 GMT
    FINDLAY, Ohio (AP) - Authorities in northwest Ohio are still trying to identify one of two people killed in a weekend plane crash. One of the victims in the crash near Findlay was the CEO of an Ohio manufacturing company. A coroner was trying to identify the remains of a woman killed in the crash, but the Hancock County Sheriff's Office says DNA testing may be needed. Deputies say Ralf Bronnenmeier, CEO of Grob Systems in Bluffton, was piloting the single-engine plane that crashed early Sund...More >>
    FINDLAY, Ohio (AP) - Authorities in northwest Ohio are still trying to identify one of two people killed in a weekend plane crash. One of the victims in the crash near Findlay was the CEO of an Ohio manufacturing company. A coroner was trying to identify the remains of a woman killed in the crash, but the Hancock County Sheriff's Office says DNA testing may be needed. Deputies say Ralf Bronnenmeier, CEO of Grob Systems in Bluffton, was piloting the single-engine plane that crashed early Sund...More >>
  • TSA finds gun, ammo in Pittsburgh airport carry-on

    TSA finds gun, ammo in Pittsburgh airport carry-on

    Monday, July 28 2014 9:35 PM EDT2014-07-29 01:35:49 GMT
    IMPERIAL, Pa. (AP) - The Transportation Security Administration says it found a pistol and ammunition in man's carry-on bag as he passed through security at Pittsburgh International Airport. TSA official tell the Pittsburgh Tribune-Review that the man wasn't allowed take the gun past security, and faces up to a $11,000 civil penalty for bringing the weapon to the checkpoint. But Allegheny County police say they don't plan to charge the man with a crime because he had a license to carry the ....More >>
    IMPERIAL, Pa. (AP) - The Transportation Security Administration says it found a pistol and ammunition in man's carry-on bag as he passed through security at Pittsburgh International Airport. TSA official tell the Pittsburgh Tribune-Review that the man wasn't allowed take the gun past security, and faces up to a $11,000 civil penalty for bringing the weapon to the checkpoint. But Allegheny County police say they don't plan to charge the man with a crime because he had a license to carry the ....More >>
  • 5 Pa. reps ask NCAA to halt Penn State sanctions

    5 Pa. reps ask NCAA to halt Penn State sanctions

    Monday, July 28 2014 9:29 PM EDT2014-07-29 01:29:22 GMT
    Five Pennsylvania congressmen are asking college sports' governing body to cancel penalties against Penn State imposed as a result of the Jerry Sandusky child molestation scandal.More >>
    Five Pennsylvania congressmen are asking college sports' governing body to cancel penalties against Penn State imposed as a result of the Jerry Sandusky child molestation scandal.
    More >>
Powered by WorldNow
All content © Copyright 2000 - 2014 Worldnow and WFMJ. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms