State Commission awards leasing rights following competitive bidding process
The Oil and Gas Land Management Commission has selected the winning bids to lease mineral rights under select Ohio Department of Natural Resources (ODNR) properties.
Under Ohio law, the commission was required to select the “highest and best bid."
The lease includes additional restrictions related to the ODNR properties, including setbacks for well placement off of state park grounds, water quality testing and restricted drilling times.
None of the leases would permit surface operations on ODNR property.
On Jan. 3 the commission posted the nominated leasing parcels for bid. Feb. 4 was the deadline to submit bids. Following the submissions, the commission members reviewed the bids to determine the highest and best bids.
Every lease agreement includes a 12.5-percent royalty paid to the state for production, per state law, with an additional financial incentive paid by the winning bidder to the state. Pursuant to Ohio Revised Code, royalties and incentives paid to the state would go back to the agency that leases the mineral rights.
The total lease bonuses for ODNR properties selected by the commission amount to $59.7 million. This is in addition to the extra financial incentives and royalties on production.
Below are the “highest and best bids” as selected by the commission:
Valley Run Wildlife Area
• Encino Energy Partners (Nomination #23-DNR-0001)
Lease Bonus: $192.50 ($3,500/acre)
Royalty: 12.5 percent
Additional financial incentive: 5.5 percent of production
• Encino Energy Partners (Nomination #23-DNR-0002)
Lease Bonus: $255.50 ($3,500/acre)
Royalty: 12.5 percent
Additional financial incentive: 5.5 percent of production
• Encino Energy Partners (Nomination #23-DNR-0003)
Lease Bonus: $1,057,446.60 ($3,500/acre)
Royalty: 12.5 percent
Additional financial incentive: 5.5 percent of production.
Zepernick Wildlife Area
• Encino Energy Partners (Nomination #23-DNR-0004)
Lease Bonus: $231,692.31 ($3,500/acre)
Royalty: 12.5 percent
Additional financial incentive: 5.5 percent of production.
Salt Fork State Park
• Infinity Natural Resources Ohio (Nomination #23-DNR-0006)
Lease Bonus: $39,646,385.00 ($10,250/acre)
Royalty: 12.5 percent
Additional financial incentive: 7.5 percent of production
• Infinity Natural Resources Ohio (Nomination #23-DNR-0007)
Lease Bonus: $18,829,763.00 ($10,250/acre)
Royalty: 12.5 percent
Additional financial incentive: 7.5 percent of production.
**For #23-DNR-0006 and #23-DNR-0007 an additional $1,000/acre was offered if Infinity was awarded both. The numbers above reflect that additional financial incentive.)
The Oil and Gas Land Management Commission will post additional information on the OGLMC webpage, including information on the other bids offered.
The selected bidders must now undergo the regulatory and permitting process through the ODNR Division of Oil and Gas Resources Management, as required by law.
ODNR ensures a balance between wise use and protection of natural resources for the benefit of all. Visit the ODNR website at ohiodnr.gov.