What’s Happening With Oil & Gas Production In Harrison County, Ohio?

Posted September 26, 2019

When it comes to oil and natural gas production, the only thing that may be predictable is its unpredictability. One moment things can be looking good, with leases signed and equipment in place. The next moment, production can be at a standstill. Harrison County, Ohio, is a great example of this.

In early 2012, Chesapeake Energy Corporation had an exploratory well in the county that came online and was successful. As a result, the company began leasing other properties in Harrison County with the full intention of drilling and extracting minerals. It looked like production would soon be booming in the area.

Then the unpredictable happened: Gas prices dropped. Chesapeake ran into some business troubles. They began pulling out of the county and selling their acreage and leases to other companies. As a result, production that once seemed like a “sure thing” in the county became delayed.

Production delays in Harrison County have lasted years and affected many landowners anticipating royalties

Nancy Deucker is one Harrison County landowner who experienced the production delays firsthand. Almost a decade ago, along with a group of other landowners in her area, she signed a lease with Gulfport Energy Corporation that was later sold to Chesapeake that was then sold to Encino Energy. While all that selling was occurring, zero production was taking place.

“From the time we signed the original leases until something really started happening, we waited, impatiently, for seven to eight years,” Nancy said. “Although they have drilled now, we don’t know what the production’s going to be and none of us have received any royalty checks.”

Nancy’s experience waiting years for production and royalties is what ultimately led her to contact Gateway Royalty and sell a portion of her royalty interest. You can read Nancy’s full story here—including how she used the money she received from Gateway Royalty for a 1031 like-kind exchange.

What’s the current state of oil and gas production in Harrison County?

As for oil and gas production in Harrison County today, the business changes taking place with companies working in the area over the past decade have created some setbacks. But the county still has a lot of potential for oil and natural gas production and there’s currently reason to be optimistic about the future.

On the challenging side, one hurdle for Harrison County to overcome is the need for more infrastructure. As a result of the turnover, the area sat for quite a while with very little development. Because of this setback, it is behind other areas in the Utica Shale play when it comes to infrastructure—which is something oil and gas companies look at when they consider when and where to start drilling.

On the positive side, Harrison County is slowly building up its oil and gas production. According to ShaleXP.com, Harrison County ranked number one in oil production for the state of Ohio in the first quarter of 2019 and number four in gas production (behind Belmont, Monroe, and Jefferson counties). Encino and Ascent Resources are the two operators currently drilling in Harrison County.

As long as gas and oil prices remain steady, the future looks bright for Harrison County. The risk is, if prices fall, the operators in the area may choose to move back to the dry gas window.

A final positive note on Harrison County and Ohio’s position in the oil & gas industry

One last thing worth mentioning: Harrison County was recently ranked as the fastest growing local economy in Ohio by Wall St. 24/7. In explaining this achievement, The Herald Star notes “Harrison County has experienced exponential economic growth in the past few years due to its position in the United States’ petrochemical industry”.

The article also mentions that the state of Ohio is a prime location for petrochemical development because it’s close to both the Utica and Marcellus shales and it’s within 600 miles of 60% of North American manufacturing centers.

Both of these news bites are indications that Harrison County and Ohio are well positioned to play a key role in the oil and gas industry for years to come.

Do you own mineral rights or royalties in Harrison County? Talk to Gateway today.

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