MWCD negotiates oil and gas lease with Encino
NEW PHILADELPHIA — The Muskingum Watershed Conservancy District has completed negotiations for an oil and gas lease for Utica Shale development for nearly 7,300 acres, the largest land lease to date on MWCD property, at Tappan Lake in Harrison County.
The lease agreement with Encino Energy was approved by the MWCD Board of Directors for review during their meeting May 20.
“The lease for property at Tappan Lake continues our tradition of balancing our desire to upgrade our operations and infrastructure for public enjoyment, renew and increase our focus on improving the watershed and water quality and protecting our resource by requiring enhanced environmental protections,” said Gordon Maupin, president of the MWCD Board of Directors.
Revenues from past leasing have allowed MWCD to invest and target nearly $200 million to upgrade facilities through a master plan redesign. Phase one of the master plan is now complete, totaling about $130 million in new project funding.
New campgrounds were constructed, and aging areas were renovated. Atwood, Charles Mill, Piedmont, Pleasant Hill, Seneca and Tappan Lake campgrounds now offer campsites with full hook-up, and 50-amp power service with level pads. Each camp area also has new, Americans with Disabilities Act-compliant restroom and shower facilities with laundry.
Phase 2 of the master plan, totaling nearly $65 million, is now in design. The focus of this phase is on amenities including additional playgrounds, spray grounds, sports courts, trails and fiber optic for improved communication, to name a few. 2021 saw a record number of visitors to MWCD lakes totaling more than 5 million people enjoying the campgrounds, marinas and lakes. Projections indicate the trend will continue for increased outdoor recreation and camping for many years to come, so the upgrades funded by leasing will serve a wide variety of users.
“We are happy to continue our partnership with Encino Energy,” said Craig Butler, MWCD executive director. “They are very committed to our operational and environmental principles, as well as investing in the region. This lease and funding will allow us to continue critical investments in our infrastructure, the communities throughout the watershed, as well as secure the long-term financial health of MWCD for decades to come.”
The five-year contract, with a three-year option to complete the drilling of this acreage, will include the drilling of at least 15 wells in the first five years with additional wells being completed in the optional three years thereafter.
Financial terms include MWCD receiving $5,500/acre, paid over five years, and gross royalty of 20%. The lease is a non-surface lease, meaning Encino will not construct well pads or other heavy infrastructure on MWCD property. It is stressed in all MWCD leases to minimize negative impacts on recreational activities and the health of our lakes and watershed.
Some of the protections negotiated into the lease include the following:
An opportunity for the MWCD to review erosion control, construction and reclamation plans.
Light and sound controls as well visual impact analysis of drilling to reduce the temporary impact on the community.
Water testing for Tappan Lake or any freshwater sources on MWCD lands for locations within 3,000 feet of a well site.