Natural gas companies eyeing Cherokee County

By Scott Wright

CENTRE — At least three major natural gas companies have been leasing mineral and oil rights from local property owners for at least the past three years, and a state official has confirmed a shale formation that may contain trillions of cubic feet of natural gas runs beneath Cherokee County.

County officials have been tight-lipped about any impending deal with one or more of the energy conglomerates. Probate Judge Melvyn Salter confirmed on Feb. 11 that “gas companies” are interested in establishing a relationship with the county. He would not name the companies or elaborate further.

On Jan. 28, commissioners voted to create an industrial development board, appointing five members to serve on an interim basis until a permanent board is established.

“That was a step the Commission took, to appoint a temporary board for 60 days until we can receive resumes and establish a permanent board,” County Administrator Tim Burgess said Thursday. “At the board's first meeting on Feb. 8, the board members chose Lowell Hamilton as chairman and TDS Telecom executive Donnie Free was chosen as vice-chairman.”

Chamber of Commerce Executive Director Thereasa Hulgan, local attorney Chad Hopper and Burgess are the other temporary members of the board.

The Post has learned that representatives from at least three major energy providers – Energen Resources Corp., the parent company of Alagasco, Dominion Black Warrior Basin Inc. and Meagher Oil & Gas Properties – have been purchasing mineral rights from property owners in Cherokee County since at least 2005.

“I've been working here three years,” said a clerk who works in the probate judge's office, where property deeds are recorded. “These gas companies have been here looking up the names of land owners so they could buy their mineral rights for as long as I've been here.”

Interest confirmed

Retired Cedar Bluff resident Forrest Pearson said he has been working with officials from one gas company since December 2006 to try and secure mineral rights from property owners in the Leesburg-Sand Rock area.

“We sold the rights to some of our property in that area and they said they were having some trouble getting other land owners to sell their rights,” Pearson said. “I told them I'd be glad to try and help lease the rights and not take anything for my efforts because I think this will eventually be a great thing for the county.”

Pearson said he spent six weeks convincing friends and neighbors in the Sand Rock area to sign over their mineral rights for a five-year period at a rate of $50-150 per acre. Ultimately, all but two families agreed, he said.

“They started out at $50 an acre on the mountain but I think it's gone up some since then,” Pearson said. “And if the company finds natural gas on the property, the land owner would get a percentage of the value. I think it's about 12.5 percent, but that's just an estimate.”

Pearson said that so far the gas companies have secured the mineral rights to over 600 acres in the Sand Rock area. The list of land owners at the probate judge's office who have already signed over their oil and mineral rights runs into the hundreds and involves several thousand acres.

“I was told that their geologists predict this area could produce natural gas for about 100 years.”

Drilling difficulties

Dave Bolin, deputy director of the Alabama Oil and Gas Board, said no gas companies have submitted an application to drill in Cherokee County as of Feb. 13. But he said it would be logical for crews currently working in St. Clair County to try and extract natural gas from the ground beneath Cherokee County, since the Consauga shale runs directly through the area.

“The companies know there is some amount of natural gas in that area,” Bolin said.

Bolin said unlike typical shale formations, the area beneath Cherokee County is unique because it is tilted at an angle that could potentially make extraction easier.

“When the mountains in that area were formed, the Conasauga shale sort of got pulled along with them,” Bolin said. “As a result, the shale is sitting at a steep angle. Instead of a deposit that is 50-200 feet thick, the shale in your area may be several hundred feet thick.”

Apparently, drilling efforts in St. Clair and Etowah counties have run into difficulties trying to reach the 9,000-10,000 ft. depths required to extract significant quantities of natural gas.

According to the Jan. 29, 2008 issue of Natural Gas Week, one company with natural gas interests in Alabama, Dominion Exploration & Production, estimates there are 1.1 trillion cubic feet of proven gas reserves in the region.

A representative for Energen refused to confirm whether her company is currently working towards drilling projects in Cherokee County.

“No comment,” said company spokeswoman Julie Ryland. “Just about any question you ask right now, that's going to be my answer.”