Sunday, December 23, 2007

Kentucky Natural Gas Exploration Under Consideration

The Henderson City-County Air Board and Henderson County Riverport Authority are considering allowing an Evansville company to explore for natural gas under their respective properties.

But the boards would like assurances that the exploration will not cause any land subsidence or other potential land-use problems. Both boards oversee land located on Kentucky 136 West between Henderson and Geneva.

"I would anticipate that the board would take action in January and that is only if they are able to guarantee that there won't be subsidence issues or obstruction of runway activities," said Air Board Chairman Scott Miller.

The riverport wants to be sure that it doesn't do something that later could complicate its efforts to persuade industries to locate at the port.

The company seeking the leases, Mid-Central Land Services LLC, has been in business for more than 30 years, according to Nathan Perdue, its director of operations.

Interest in natural gas exploration in Western Kentucky has spiked in recent years, and more than 4 million acres have been leased around the Illinois basin, according to Mark Hughes of Henderson, a vice president of the Kentucky Oil and Gas Association.

"This company is just leasing up (mineral rights from) everybody across the countryside," Greg Pritchett, director of the riverport, said Thursday.

In making his presentation to the Air Board recently, Perdue said his company might drill sideways to the natural gas so there is no well on airport property.

He made similar remarks to the riverport board, Pritchett said.

If natural gas is discovered, the airport or riverport would receive a 12.5 percent royalty payment on the total amount of natural gas that is removed over a five-year lease. But no firm dollar figures were presented verbally to the air board. Miller said the amount of money the board would receive depends on the type of drilling method used.

Riverport officials aren't sure what the revenue potential is. The port has acquired various parcels of property over the years, and while it owns 100 percent of the mineral rights under some parcels, it controls rights only at certain depths underground beneath other parcels.

"There is a percentage chance of hitting" natural gas reserves underground, Pritchett said. "There is a bigger percentage of hitting nothing."

"If we do not have sufficient underground ownership, why even try" to lease its mineral reserves, he said.

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