BARNESVILLE — Village Council recently voted in favor of entering a gas and oil lease with Blue Baron Energy for 177 acres of village-owned property within the corporation limits.

Council had voted in January to advertise 177 acres of village-owned land for the purpose of leasing gas and oil rights and had received two bids in response. Those were opened and read in brief during the March 11 council meeting before being turned over to Village Solicitor Richard Myser so he could better scrutinize the offers.

During the March 25 meeting, Myser broke down the offers, saying that Gulfport Appalachia had offered a five-year lease of all 177 acres with a $7,500 per acre signing bonus and 20% of gross royalties. Blue Baron had offered to lease 172 acres with a $6,750 per acre signing bonus and 20% gross royalties. Myser noted that he did not know the reason the Blue Barn lease was for only 172 acres.

Myser said that besides the stated differences, the two leases were essentially the same regarding the addendums and other details.

“One of the things I did not like on both of them is that they are targeting the Point Pleasant vein of oil and gas. Both of them had depth restriction language that was almost the same,” Myser added, going on to say he had contacted the land agents for both companies and neither was willing to change the depth restriction to only include the Marcellus and Utica shale layers.

Shales are layers of soft, sedimentary rocks that contain deposits of fossil fuels. The Marcellus layer is generally the shallowest shale in Eastern Ohio, with the Utica layer beneath it and the Point Pleasant layer even deeper, but spanning a smaller area.

Mayor Jake Hershberger said that as he understood it, Blue Baron had “closer laterals” in its plan, which would lead to greater production and royalty earnings. Oil and gas are produced from shale layers through hydraulic fracturing, a process that injects high-pressure water, sand and chemicals into the layers to break the rocks apart and release the fuels. Once a vertical well is drilled, horizontal shafts radiate out from them in various directions.

Hershberger also said that Blue Baron was “buying for Grenadier (Energy), which has leased a lot of land from Barnesville residents from Main Street south and from South Chestnut Street east, that whole corner, with the intent to drill.”

Steve Penland of Western Land Management, who later said he was working with Blue Baron in the area, said that while he understood the difference between the signing bonuses seemed significant, he “would want to lease with a company that I knew was going to develop and drill the land properly to get the most return.” He later added that Blue Baron/Grenadier were “champing at the bit to develop this.”

Penland also said he was unaware of the reason for the acreage discrepancy but that he was confident it could be worked out.

Councilman Steve Hill questioned whether Gulfport had any intention of actually drilling, saying he believed the company was merely acquiring the rights to sell off later.

“The other thing, I think, the village of Barnesville has a reputation with Gulfport,” Hill said.

In 2015, Gulfport Energy brought a lawsuit against the village, with which it had a water purchasing agreement, for denying the company access to water from the Slope Creek Reservoir due to low water levels. In 2016 a tanker truck contracted by Gulfport overturned on Ohio 800 south of the village, spilling 5,000 gallons of brine into a stream that fed into one of the village’s reservoirs.

The 2015 lawsuit was dropped so Gulfport and the village could reach an amicable solution to the dispute.

Council President Tony Johnson made a motion to “go with Blue Baron,” which was seconded by Hill. Johnson said he wished to suspend the rules requiring that ordinances be read three times as Myser began to explain the procedure.

The motion to suspend the rules passed with Councilwoman Robin Misner along with Councilmen Les Tickhill and a hesitant Terry McCort joining Hill and Johnson with “yes” votes. Councilman Brian Yarnall voted “no.”

The motion to adopt the ordinance to enter into the lease agreement and authorize Hershberger to sign the paperwork with Blue Baron passed 5-1 with Yarnall again being the only “no” vote.

Barnesville council’s next meeting, which is scheduled for 7 p.m. Monday in the Municipal Building on Arch Street, will be preceded by an open Development Committee meeting at 6 p.m.