Washington County Commissioners signed lease papers with MNW Energy, LLC Thursday morning to lease county lands for drilling and received a $1.25 million check for their efforts.
The land surrounding the Washington County Home have been desirable for some time for oil and gas companies, totaling nearly 265 acres. Commissioner Tim Irvine said that a little more than 15 acres will be dedicated to a gathering pipeline only. On nearly 100 acres immediately surrounding the county home, Irvine said there can be no surface disturbances, but on the remaining acreage, surface drilling is approved.
"It's been a time getting here, but we finally are here," said MNW CFO Doug Mallett.
The deal has been in the works since before January, when commissioners agreed to enter into the lease with MNW Energy. MNW did assign the lease to Protege Energy III, based in Tulsa, Okla.
"Protege Energy (III) is the money behind the deal we leased," Mallett said. "They're doing a nice job of helping develop the play here."
Mallett said investments in Washington County could reach a hefty sum.
"(Investments have totaled) over $31 million in the last three to four weeks and there's still more to do," he said. "Just on the lease side (investments can reach) $40 million probably."
The total check for the county is worth $1,252,407.50. Irvine said the total amount per acre is around $4,735.
Commissioners had to sign a ratification of the lease and sign the receipt of the check, said Mallet.
"It's been a four-month window since (we did the deal), and now we have to re-ratify that (commissioners) haven't leased with somebody else or done something else," Mallett said.
The lease is for a total of five years.
Commissioner David White said the investment Protege is putting into the county is huge, and though commissioners are excited about the money, a spending frenzy will not occur.
"It's a one time windfall," White said. "We have to make sure we don't spend in such a way that we become accustomed to extra money. Otherwise we'd be in a pattern where it's not sustainable."
White said it's possible some of the money would go into the budgeting stabilization fund and other capital improvements funds, and the total amounts are to be determined.
Commission President Ron Feathers said it is the goal of the commissioners to make sure the money is properly taken care of.
"In that check is about 10 percent of an annual budget," he said. "Now we just need to make sure we steward the money correctly so the citizens of the county can benefit from this for years to come, because this is a one-time shot."