YSU set to drill gas well for cash

Drilling a gas well won’t preclude the sale of the land to the Liberty school district.

By Harold Gwin

YOUNGSTOWN — Youngstown State University wants to have a gas well drilled on some vacant land it owns in Liberty Township.

It’s a move that could net the university nearly $250,000 over 20 years. At the very least, it would mean $20,000 for YSU’s coffers.

The university has about 17 acres of property just south of Interstate 80 and adjacent to Liberty High School. It’s property the university received many years ago as a gift, said Scott Schulick, chairman of the YSU Board of Trustees. The university has no use for the land and has discussed selling it to the Liberty Local School District, he said, noting that the schools use it now as an athletic practice field.

The trustees had considered a resolution authorizing the sale to Liberty schools earlier this year, but put it on hold when the opportunity arose to lease the land for gas drilling, he said.

The property will still likely be sold to Liberty, but YSU will retain the mineral rights, allowing the drilling to proceed, Schulick said.

The trustees’ finance and facilities committee approved the plan to lease the drilling rights to Ohio Valley Energy Systems Corp., Austintown, and the full board is expected to approve the arrangement Friday.

It could mean a new revenue stream for the university, Schulick said.

The agreement is for two years and calls for the drilling of a single well, said Atty. Greg Morgione, YSU’s associate general counsel.

It provides for a $20,000 “up front” payment to the university for the right to drill and could mean as much as $243,108 over a 20-year period, he said.

The location of the well won’t interfere with Liberty schools’ use of the site for athletic practice sessions, he said. The lease allows YSU to lay it own pipelines to the well and take up to 300,000 cubic feet of natural gas free per year for use in its buildings, plus receive royalties on gas sold by the company.

In lieu of running its own pipeline to the site, YSU can get cash payments instead of taking the 300,000 cubic feet of free gas.

As YSU isn’t in the pipeline business, it will opt to take the cash and royalties, Schulick said, noting that could total $243,108 over the life of the well, expected to be 20 years. That figure includes the $20,000 “up front” signing bonus.

Because YSU is a state school, the lease arrangements must also be approved by the governor and the state’s Department of Administrative Services, Morgione said.

gwin@vindy.com