BP Pays $3,900 Per Acre For Trumbull Utica Shale Acreage
BP recently announced that it has reached an agreement with a Trumbull county Ohio landowner’s group to lease 84,000 acres in the heart of the Utica Shale liquids play. Source: Reuter’s News. This is the first investment by BP in the Utica Shale, but it is likely that more is to come. Over the next six months BP will also sign individual leases with mineral rights owners and then appraise the potential of the acreage. The Trumbull county lease was negotiated by a landowner’s group, The Associated Landowners Of The Ohio Valley. The BP Trumbull county lease represents the largest single oil and gas lease ever negotiated in Ohio. Some of those who attended the meeting reported that the lease bonus payment for Trumbull county acreage paid by BP was $3,900 per acre, with a royalty percentage of 17.5%.
The Utica – Point Pleasant shale in Trumbull county Ohio lies at a depth of approximately 6000′. BP already has a major presence in the Eagle Ford shale play, a similar liquids – rich oil and gas discovery in Texas, as well as the Haynesville shale and Fayetteville shale.
“We are very encouraged by what we have seen of the Utica/Point Pleasant formation,” said Tim Harrington, regional president for BP’s North America gas business. “Our focus in 2012 will be to better understand the geology and devise a plan to safely develop the resource.”
Since the Deepwater Horizon tragedy and oil spill of 2010, BP has been seeking to recover lost ground in terms of shareholder profits. Acquisitions like the Trumbull county Ohio lease should prove to be wise investments given the current value of natural gas liquids.
The price per acre being paid for Utica Shale leases, as well as royalty percentages, have risen dramatically over the past year, due mostly to production figures coming in from new wells.