Wanted: Ill. farmland to lease for natural gas exploration
- By Len Wells
- Posted March 6, 2010 at 11:21 p.m.
A Louisiana energy company has sent a team of workers to Edwards County, Ill., to lease hundreds of acres of farmland for a natural gas exploration project. The company is targeting a gas-bearing shale formation known as the New Albany Shale Group that lies about 5,000 feet beneath the surface.
"We first noticed the company doing research in the county assessor's office about three weeks ago and decided to invite them to address our board," said Rebecca Perry, director of the Edwards County Farm Bureau. "They actually wanted the board's help getting these leases signed. But, it's our position that we neither support nor oppose their plans."
In an effort to understand Eagle Resources' plans, the Farm Bureau asked the company's chief executive, Earl Jenevein, to speak to landowners. In addition to Jenevein, a Farm Bureau attorney and a local lawyer with experience in oil and gas leasing were present to answer landowners' questions.
During the first meeting, more than 70 landowners showed up.
Calls to Jenevein seeking his comments on the project were not returned.
Eagle has plans to drill down to the New Albany Shale Group, also known to local oil producers as the Devonian formation. After reaching the targeted shale formation, the company plans to drill four offset or horizontal wells to collect the natural gas.
Each horizontal well also would be 5,000 feet. Company officials say they must have 640 acres under lease for each of these collection wells.
Landowners who have been contacted by Eagle Resources have been offered $6 per acre for their land for each year of a five-year lease. In return for the lease, the landowner would also receive one-eighth royalty on any natural gas produced from the wells, which is considered a standard oil or gas royalty in the Tri-State oil basin.
"They've told us they first plan to drill three core sample wells around the first quarter of 2011," Perry said. "The most promising of those test wells would then be drilled for production. If they're successful, they tell us they plan to lease as much land as possible in Edwards County, and then expand outward from there."
The area being targeted by Eagle Resources is in the southwestern part of Edwards County, near the Wayne County line. Specifically, the company is interested in land in Ellery and Dixon townships. Company officials said they chose the area because of its proximity to cross-country pipelines.
The natural gas potential of southeastern Illinois is well-known by researchers with the Illinois State Geological Survey.
Studies indicated that a 19-county section of southeastern Illinois is a favorable area to explore for gas in the Devonian shale formation. In a published study, Robert M. Cluff of the Illinois Geological Survey wrote, "Although gas shows in the shales have been encountered in several wells drilled in this area, no attempts were made to complete or evaluate a shale gas well until 1979."
In 1979, core samples from two Wayne County wells were obtained, permitting the first quantitative assessment of gas content of the shales.
Cluff wrote that it will take unconventional drilling techniques to extract the natural gas.
"Commercial production of shale gas in Illinois probably will require novel drilling and completion techniques not commonly used by local operators," Cluff wrote.
Local drilling contractors have been contacted by Eagle about their exploration plans.
Officials with the Farm Bureau are advising landowners to consult an attorney before signing any lease forms.