Recordpub.com - Kent Council ok's gas, oil well on city property

By Matt Fredmonsky

Record-Courier staff writer

A natural gas and oil well will soon pop up on taxpayer-owned property in the city of Kent near the campus of Kent State University.

The Cutter Oil Co., operating out of West Salem in Wayne County, gained approval for a lease with Kent City Council after obtaining agreements with two other property owners to drill for oil and natural gas near the College Towers apartment complex between Loop and Horning roads.

In a memo to Kent City Manager Dave Ruller, Kent Law Director Jim Silver and Kent Service Director Gene Roberts stated Cutter Oil has obtained oil and gas leases with the university and the owners of the apartment complex. The wellhead will be located on city property with the target zone of the well located beneath university property southwest of the apartments.

Roberts told council Wednesday the city will receive royalties based upon 15 percent of the well's production.

"What the city could receive, because we're citing the actual wellhead on city property, is called a spud fee," Roberts said. "The fee that's paid for the disruption of the property initially and in perpetuity."

The city could additionally obtain the first 3,000 cubic feet of gas per year from the well or the cash equivalent.

"Then the royalty is paid based on 15 percent of the total well production value times your land mass relative to the total 40 acres," Roberts said. He estimated the city could gain $107,000 over 10 years, based on early 2008 gas market prices.

The Ohio Department of Natural Resources Mineral Resources Management office requires a minimum of 40 acres of land for wells that bore 4,000 feet or more. To reach that amount, the city would contribute approximately six acres with the College Towers owners contributing 10 acres and the university providing the bulk with 24 acres for the well lease.

Because this well will be a target well, the actual drilling process could take 10 days of continuous, 24-hour-per-day drilling. When completed, the wellhead and apparatus would be enclosed behind an eight to 10-foot board-on-board fence.

In August, council members voted unanimously to support a measure presented by Councilman John Kuhar encouraging the city to examine the potential for such wells on city property. Kuhar made the motion Wednesday to allow Cutter Oil, which has drilled several wells in the city, to drill the Polack Well near College Towers.

The motion passed unanimously, and drilling could begin in late spring or early summer of next year.

"I'm about a real good, strong arm's throw away from the (well) on Rhodes Road," Kuhar said. "I didn't know it was coming until I saw a sign in front of it. Yeah, there was some noise and dirt from debris for a couple weeks when they were doing it, but if you go past there now it looks like a well-manicured country club."