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Drillers bid millions for oil, gas beneath West Virginia public lands

| Tuesday, Jan. 27, 2015, 12:01 a.m.

CHARLESTON, W.Va. — West Virginia officials have opened millions of dollars in bids to drill for oil and natural gas beneath state-owned lands, including waterways and a wildlife management area.

One of the biggest offers the state Department of Commerce opened Friday would let Antero Resources Inc. drill underneath 283 acres of Jug Wildlife Management Area in Tyler County for $2.3 million, plus royalties.

The leases for Marcellus and Utica shale mineral rights, which allow for hydraulic fracturing, commonly called fracking, are a new undertaking for the state.

Only one lease agreement has been finalized: a $6.2 million deal letting Antero drill below 518 acres at the Conaway Run Wildlife Management Area in Tyler County, said Department of Commerce spokeswoman Chelsea Ruby.

On Friday, several other bids were submitted:

• Jay-Bee Production Co. bid amounts ranging from $5,000 to about $16,300 per acre for various tracts of the Jug wildlife land.

• Noble Energy offered about $685,000 total to drill beneath 134 acres of Fish Creek and adjacent land in Marshall County.

• StatOil USA Onshore Properties Inc. bid $9,000 per acre to drill under a 2-mile section of the Ohio River in Wetzel County.

For all deals, the state requires an additional 20 per-cent royalty on what's extracted. The leases run for four years.

The actual drilling and storage of equipment will be done off state land. The mineral money must go to the state Division of Natural Resources.

The state is negotiating with high bidders on three other sections of the Ohio River, and one will go back out to bid.

Noble Energy has bid $4.9 million on one 1,400-acre tract, while Gastar Exploration would pay $812,000 to lease a separate 232-acre tract.

Statoil USA was the high bidder on another Ohio River section at $8,215 per acre.

Additionally, Triad Hunter rescinded its offer on two parts of the Ohio River because the company would not comply with the state's terms. Those sections are going back out to bid.

Several environmental groups have opposed the Ohio River drilling, since millions of people depend on the river for drinking water.

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