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Monday, June 10th, 2013

Crude crusade ongoing

Derrick near Fort Recovery pumping oil

By Shelley Grieshop

An oil derrick is pumping small amounts of petroleum on land near the intersecti. . .

FORT RECOVERY - The fields of Mercer County may have a new cash crop - oil.
Three test wells recently were drilled on private ground in the rural Fort Recovery area by Buckeye Oil Producing Co of Wooster. Two of those wells are producing modest amounts of petroleum, according to company president Mark Lytle.
"We're just in the preliminary stages and we've seen some early results but it's too soon to tell," he said.
Buckeye Oil in recent months penned more than two dozen land lease contracts involving more than 4,100 acres in Granville, Recovery and Gibson townships. Most, if not all of the landowners appear to be farmers. Lytle said not all the sites will yield oil wells; the contracts include drilling rights and pipe installation.
Four land leases involving more than 1,800 acres in rural Celina were recorded locally one month ago by Johnston Petroleum Corp. of Greenwood Village, Colo. Calls to the company seeking information were not immediately returned.
Only 11 oil wells have been drilled in Mercer County since 1961 despite the area's rich oil-producing history, according to data from the Ohio Department of Natural Resources.
In the 1800s, the region from Mercer County to Wood County in northwest Ohio, and west to Indiana, was the birth site of the state's oil industry. By 1886, the "Lima field," as it was called, was the nation's leading producer of oil. One year later it was considered the largest oil-producing region in the world until it reached its peak in 1896.
In the 1890s, Grand Lake became the site of the first off-shore oil drilling platform. By 1915, the lake was home to more than 150 oil wells.
Lytle hopes to revive the historical oil boom that centered around the area's underground Trenton Rock Limestone formation. He chose the townships of Granville, Gibson and Recovery because he could lease blocks of land in close proximity, he said.
Farmer Bob Guggenbiller owns land near Meiring and Fox roads that houses one of Buckeye Oil's producing wells. He agreed to lease more than 300 acres to the company. He knows about the area's oil history and wouldn't mind some extra income from crude profits, but he's skeptical.
"I can tell you right now, it's not a gusher," he said of the oil well on his land.
Retired farmer Leo Hart, 80, said the Buckeye Oil well on his property along Fort Recovery-Minster Road hasn't been too successful yet, but he's optimistic.
"There's still some old wells around here, a lot in the Sharpsburg area that did real well," he said, adding a few are still used today to pump natural gas.
He, too, would like to see an oil windfall.
"The price of oil is pretty good right now," Hart said.
All the lease contracts between local residents and Buckeye Oil are similar; they provide landowners a royalty stipend of one-eighth or 12.5 percent of all gas and oil profits, before expenses. The contracts also give leasors up to 200,000 cubic feet of natural gas each year, at no charge, if a well on their land produces.
Lytle confirmed that signing bonuses also were given to property owners but he did not specify amounts.
"We take a $150,000 gamble (initial company investment per well) and they take a gamble with their land," he explained.
The wells utilize a 30-foot-by-50-foot parcel of land; the ground can be farmed within a few feet of the well, Lytle said.
In the next couple months Buckeye Oil plans to conduct seismograph testing at some of the leased properties east of Fort Recovery. The process could help identify pockets of oil, Lytle said.
"We'll use four of five big trucks that physically bump the ground," he said.
The "thumper trucks" rest on pads and force air into the ground, he explained. The action likely won't be felt by people in the area, he said, adding companies years ago used dynamite.
Lytle was quick to note he is not using the controversial hydraulic fracturing or "fracking" method to drill the local wells. Fracking involves the injection of water, sand and chemicals deep into the ground at high pressure to crack the shale and free oil and/or gas. The practice has raised concerns over ground water contamination, earthquakes and other issues.
Lytle said his wells are vertical and shallow - 1,400 to 1,500 feet deep. His main interest is finding oil because it's less abundant and more profitable than natural gas, he added.
Matt Bruce, spokesman for ODNR, said a lot of factors must be present to be a successful oil driller.
"It's like baking brownies. You have to have the right ingredients, temperature and time," he said.
He doesn't believe Mercer County is a hot spot for the petroleum industry.
"But this company sees something ...," he added.
Lytle, who's drilled for oil in other states, said work is going "very smooth" right now. He's amazed it's only taken a few months to get leases finalized and regulations met to begin drilling.
"It would have taken us five years to get this far in Colorado," he added.
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