Gastar Exploration is the winning bidder for the right to develop the Marcellus and Utica formations under the Ohio River in West Virginia.
The Intelligencer / Wheeling News-Register reports:
Because his company spent more than $500 million while successfully fracking 64 Marcellus and Utica shale wells in Marshall County, Mike McCown believes Gastar Exploration can extract natural gas from beneath the Ohio River.
On Friday, McCown, chief operating officer for Gastar, and West Virginia Deputy Secretary of Commerce Joshua Jarrell said the Houston, Texas-based firm is the highest bidder for a 232-acre tract underlying the river at the border of Marshall and Wetzel counties.
"We are still negotiating the final contract," Jarrell said. "We have identified Gastar as the successful bidder, but we are still working out the lease."
The financial terms for Gastar’s bid call for the company to pay the state $3,500 per acre with 20 percent worth of production royalties. This means the company will pay West Virginia $812,000 for the drilling rights, while the royalties would go to the state once gas starts pumping.
"We drill under streams, valleys and houses routinely," McCown said when asked about environmental concerns associated with the project. "This is a great opportunity for us and for the state."
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