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Research phase of oil, gas drilling begins to dry up in Trumbull County
By Ed Runyan
WARREN
As Trumbull County has moved into the drilling phase of its Utica Shale play, another phase — title research — appears to be trailing off.
Locals learned of the economic potential of the Utica shale play in Eastern Ohio about two years ago. Not long afterward, title researchers started to swamp county courthouses in Columbiana, Mahoning and Trumbull counties.
They researched titles of properties that oil and gas companies might want to lease for drilling and the land that might be needed for pipelines to carry gas and oil to market.
In Trumbull County, the influx was marked by dozens of new people in Warren, most of them young, carrying small binders and folders as they quietly carried out their document searches in several offices run by the county recorder and probate court.
Several offices opened on Courthouse Square — for BP America, Duncan Land Services of Pittsburgh, WSH Land of Texas. Outside their offices, many of their vehicles had license plates from Texas, Oklahoma and other places.
In March 2012, the Trumbull County Recorder’s Office announced the Associated Landowners of the Ohio Valley had agreed to pay $253,877 to allow Document Technology Systems of Cuyahoga Falls to scan and digitize Trumbull County deeds and records dating back to 1795 at no cost to the county so the records would be available online.
At about the same time, BP America reached an agreement to lease mineral rights from 1,900 Trumbull County land owners for 84,000 acres. It was the largest single mineral-rights lease in state history.
The title researchers and their supervisors have not agreed to conversations about their work, but officials with the Warren Income Tax Department promised to provide tax-return information after the April 15 deadline.
Sharon Woodward, tax investigator for department, said she still doesn’t have a lot of information to provide, such as the amount of money the researchers earned while working in Warren.
But she does have a number — 63 — which is how many people received a 1099 form for earning income in Warren in 2012 in oil and gas-related work. A 1099 is used by people working as an independent contractor, which is what most of the people working in Warren for gas and oil companies were, Woodward said.
Most of those people were from outside the area, she noted. And many of them were finished with their work in Warren by late 2012, she said.
No tax returns have been received for any of the companies that established offices in Warren, Woodward said, because they received a six-month filing extension.
One company that did file a return was Document Technology Systems. It employed 36 people last summer and paid them $70,000 to scan the deeds and other records at the recorder’s office.
A supervisor for WSH Land, which has an office on South Park Avenue downtown, agreed that the bulk of the title research work was done in 2012 and the volume of that work is down considerably this year.
The work peaked around the time BP signed its 1,900 leases, said the supervisor, who declined to give his name.
WSH Land is one of several companies BP employed, the supervisor said, adding that his company may still have additional work to do as the drilling of wells progresses. BP and Halcon Resources are drilling several wells this spring.
The productivity of BP’s wells will determine how much more work WSH Land does here in the future, the s upervisor said.
Diana Marchese, Trumbull County recorder, said the decreasing number of leases being recorded at her office is further evidence that title research is on the wane.
The peak time for leases being recorded was the first four months of 2012, when there were 7,412. The number dropped to 4,592 for the May-to-August period, down to 2,590 for the September to December 2012 period. They dropped even more — to 1,088 — for the first four months of 2013. The number for September to December 2011 was 3,433.
Marchese said the number of leases recorded is an indicator of title research and land-work activity. Another indicator is the number of title researchers coming into her office. The flow has nearly stopped, Marchese said.
Woodward said title researchers are reporting that they earned only a percentage of their income in Warren with the rest being in other locations. In many cases, the searchers do their work at a computer, so the location of their earnings would be the location where they worked at their computer, Woodward said.
BP moved its offices from Warren to North Jackson early this year.
A supervisor for Duncan Land Services of Pittsburgh who declined to give his name said he doesn’t know how many workers his company employed at the company’s office on North Park Avenue on Courthouse Square.
He said Duncan is different from some other companies, however, in that it hired its workers “locally, to help the community.”
Eric Planey, vice president of International Business Attraction for the Youngstown/Warren Regional Chamber, said the economic activity resulting from Utica Shale activities across the Mahoning Valley is impressive — from construction and regular workers at V&M Star, to workers at TMK-IPSCO in Brookfield, to signing bonuses for land owners, to truck purchases from those owners, to greater loan capacity among area banks from their bank deposits, to increases in business among restaurants and hotels.
It’s a little harder for Mahoning Valley residents to see the supply chain for the gas and oil industry than for industries of its past because “it is so new,” Planey said.