HARRISBURG – The state Game Commission said Wednesday it approved an oil and gas agreement with Chesapeake Appalachia for 1,200 acres of land comprising State Game Land 232 in Donegal and Independence townships in Washington County.
The commission also announced an amended lease agreement with Chevron for state game lands in Greene County.
In addition to receiving a 23.25 percent royalty on the value of oil, gas and condensate produced and sold from the Washington County site, the commission will receive a one-time bonus payment of $3,003,325 that will be deposited into the Game Fund or an interest-bearing escrow account for the future purchase of wildlife habitats and land or other uses incidental to hunting, furtaking and wildlife resource management.
The commission said the other bidder on the project was Range Resources, which offered a 20 percent royalty bid.
The bids were opened Nov. 2.
In October, the Game Commission offered its oil and gas ownership under 1,201.33 acres of the gamelands for nonsurface oil and gas development by a competitive royalty bid. Its offer stipulated a one-time bonus/rental payment of $2,500 per acre for a one-year term agreement. The commission set a minimum royalty at 18 percent for all oil, gas and condensate produced and sold from under the site.
It said oil and gas development will be regulated by the Department of Environmental Protection’s oil and gas regulations and the Game Commission’s Standard Restricted Surface Use Oil and Gas Cooperative Agreement.
In related business, the commission said it approved an oil and gas lease amendment involving State Game Land 223 in Dunkard Township, Greene County.
Under an amendment request by Chevron Appalachia, the commission will add an additional 33.983 acres to the existing agreement.
The commission said it owns the surface and 50 percent of the underlying oil and gas rights. Chevron has leased the privately owned oil and gas rights and has agreed to nonsurface use on the portion of the game land.
While the amendment remains consistent with the terms of the original lease agreement approved by the commission in April 2008, the commission said its bonus payment will be increased from $125 per acre to $1,500 per acre for the amended acreage. The payment also will be deposited into the Game Fund or an interest-bearing escrow account.