North Huntingdon commissioners want more time to consider natural gas lease

A majority of North Huntingdon commissioners decided this week they need more time to study a proposed lease to tap into a pocket of natural gas trapped in a 4½-acre parcel of township land and possibly extract a better deal from the drilling company.

Commissioners on Wednesday voted 5-2 to table approving a lease with Apex Energy of Marshall that would have allowed the driller to get the gas below property that abuts homes on Peregrine Drive.

Commissioners Jason Atwood, Fran Bevan, Richard Gray, Eric Hass and Tom Hempel supported tabling the lease even though an Apex Energy leasing agent told the commissioners last week that the deal would expire June 30. Commissioners Zachary Haigis and Ronald Zona opposed tabling a vote.

Apex Energy intended to pay the township $6,750 for a five-year lease to drill into the property for which North Huntingdon owns the oil and natural gas rights, plus pay the municipality a royalty fee of 16½% of the price that Apex receives when it sells the commodity. The township would receive the royalty checks on a monthly basis if its natural gas is sold on the market. If the township had received a royalty check, the five-year lease was to be renewed automatically.

C. Zane Keslar, senior lease acquisition agent for Apex, did not attend the meeting Wednesday and said he could not comment on the township’s decision.

Apex wants to drill to create seven pipelines from a well pad off Herminie Road, south of St. Edward Parish. Apex would drill 8,000 feet, then drill horizontally toward the township’s pocket of methane. It would fracture the layers of shale with a liquid solution to release the gas, but no surface work would occur in North Huntingdon, Keslar said.

The driller presented the township with the proposed lease earlier this month because it had not previously discovered the township owned the gas rights to its land.

Hempel said he believed that Apex Energy’s proposed lease still would be valid next month and the company may be willing to negotiate.

Apex would not negotiate terms of the lease, Keslar told TribLive.

“It sounds to me like they are pushing this on us,” Hempel said.

Zona indicated that waiting until July might be too late.

“There’s no use discussing it ’cause the deal is off the table,” he said.

Apex Energy’s June 30 deadline may simply be a date “that is set by the salesman,” Gray said.

In seeking to table the lease deal, Gray said the township should have done more of its own research.

Leasing public land in North Huntingdon to drillers is not a new concept. Gray said the township has allowed natural gas companies to drill under Oak Hollow Park and Braddock’s Trail Park.

Unlike the township commissioners, the North Huntingdon Township Municipal Authority last week approved a lease with Apex Energy to drill under its .5-acre parcel near the township’s land. The authority will pay $1,000 for the right to get that gas, said Michael Branthoover, authority executive director.