Matt Hrodey, News-Courier Staff Writer
A real estate and drilling company based in Evansville has been purchasing the rights to natural gas deposits lying under Henry County for about a year.
Mid-Central Land Services has negotiated leases with farmers in northern parts of the county that would allow the company, or a company it's representing, to do exploratory drilling and other tests.
Director of Operations Nathan Perdue said the county is part of the Trenton oil and gas field, an area that has seen only sporadic drilling in the past 50 years. "There hasn't been a very focused approach," he said. But MCLS might change that.
High gas and oil prices are making less productive fields more lucrative, according to Purdue. "Areas that people would normally not go into are becoming more attractive," he said. "Companies are starting to go into these areas."
Local landowner Marvin Luellen, owner of Luellen Farms & LP Gas Service near Mooreland, said he signed a five-year lease with MCLS where he was paid $10 per acre. He receives one-eighth of any profits that result from drilling, he said.
Some farmers have resisted leasing their land. "My idea on it was, if we've got all this gas, let somebody get at it," Luellen said.
Matt Chapman said he and his father, Tim Chapman, negotiated with MCLS but didn't reach an agreement. "There were too many unknowns," he said.
The lease the company offered them at first, he said, was unlimited. As with Luellen's lease, the company would pay the Chapmans a percentage of the profits. They rewrote the agreement to be capped at five years, but MCLS declined.
Matt Chapman said he and his father were concerned about byproducts, such as saltwater, that drilling can elicit. Settlers first discovered oil and gas deposits in Indiana in the mid-1800s while drilling for saltwater to use in preserving food, according to the Indiana Geological Survey research institute at Indiana University.
It reports one hot spot, currently, is an unconventional natural gas reservoir in Harrison and surrounding counties, where nearly 500 wells have sprung up since the mid-1990s. "There is a fair potential for the discovery of significant new reserves in the state," says an online IGS publication.
County Commissioner Bill Cronk, who lives near Sulphur Springs, signed a lease for his land, receiving $10 per acre for a five-year window where the company can test the property for resources. Nobody has done anything yet, he said, on the approximately 300 acres he leased.
Striking it rich?
While oil is a possibility, natural gas is more likely, according to Perdue. "Once you get into the Trenton field, there's a lot more gas, but there's potential for both," he said.
Perdue declined to say if MCLS is leasing land for its own drilling or for another company to drill. "We do both," he said. "I really can't comment on the capacity we're operating under as far as the drilling is concerned," he said.
Perdue also declined to say how many Indiana counties MCLS is pursuing similar leases in or if any explorations in Henry County have yielded notable results.
MCLS has operated in most of the large oil and gas basins in the United States, he said, since its creation 30 years ago. The company has worked in Texas, Arkansas, Pennsylvania, Illinois, Kentucky, Utah, Colorado and Oklahoma, he said.
Bruce Atkinson, county geographic information systems administrator, said representatives of the company have been one of the largest buyers of maps since they started using his office in late 2006.
They typically use the GIS office to look up a farmer's land on a public terminal and print out a map to use when discussing a lease, Atkinson said. MCLS started with land in northern Henry County, he said, and recently moved into Liberty Township.
Not all gas and mineral explorations require drilling. Perdue described methods for shooting sound and magnetic waves into land and reading the feedback.
Most likely, he said, the Trenton field lends itself to small wells, not the large rigs seen in areas such as Texas. "The footprint is not big. You can plant crops right up to them (the wells)," he said.
A representative from the field office established in New Castle, Richard Jobe, spoke to the Henry County Commissioners on July 9 about purchasing the GIS database. Jobe said he would provide the commissioners with a copy of a contract used in other counties.
"Usually, we do not sell the GIS data to a company that's going to turn around and sell it," Atkinson said, but he said he doesn't think that's the case with MCLS. He said the company has gotten to a point where it wants to manage the leases it has in the county.
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