Bid to frack under West Virginia wildlife management land could yield $6.2M, royalties

A company has bid $6.2 million plus royalties to drill for natural gas and oil under state wildlife conservation land in Tyler County.

Denver-based Antero Resources is offering to pay more than $12,000 an acre for fracking rights under Conaway Run Wildlife Management Area, state Commerce Secretary Keith Burdette said. The bid includes a 20-percent royalty on what's extracted, and the lease would likely last three years.

The bid on the 518-acre wildlife area's oil and natural gas rights was unveiled Friday in Charleston. The land is used for hunting, fishing and camping, and includes a 100-yard rifle range.

Houston-based Noble Energy submitted a bid for about half the upfront money with the same royalty rate.

"One of those two bids is probably a record," Burdette said.

It's the second time West Virginia has offered to let companies drill horizontally under its land. Leasing the land for the technique called hydraulic fracturing, commonly called fracking, is a new venture for West Virginia, and officials think it could produce plenty of money during uncertain budget times.

In West Virginia's first try at fracking leases, officials opened bids for 22 miles of state land under the Ohio River in September. Six miles are under contract negotiations and another 11 miles are out for bid or will be shortly. Seven additional miles are being considered for bid openings.

Environmental groups cautioned Gov. Early Ray Tomblin to reconsider the Ohio River leases, since they would allow drilling beneath a river that provides drinking water to millions of people.

Burdette said the drilling would occur about a mile under the river. State environmental regulators would still have to approve permits for the operations.

All drilling equipment would need to be off-site of the state lands, Burdette added.

Other properties the state is thinking about leasing rights for include: 131 acres under Fish Creek in Marshall County; Jug Wildlife Management Area in Tyler County; and 24 acres in Doddridge County.

No fracking contracts have yet been finalized, however. All the money from the state's fracking leases would go back into Division of Natural Resources needs, like upgrades at state parks.