The Duncan Banner

Local News

October 10, 2008

Bids opened for oil and gas drilling at Duncan Lake

Derrick Miller

DUNCAN — Duncan Lakes Commission members discussed bids received to lease land for oil and natural gas drilling.

The commission opened three bids from two companies for land at Duncan Lake. Chesapeake Exploration LLC put in two bids on the same parcel of land, while LE Jones Production Co. put in a bid that addressed all six parcels.

Scott Vaughn, Duncan public works director, said, “Chesapeake approached us about leasing land for oil and gas drilling. We did solicit bids.”

During the discussion, commission members reviewed the bid tab, which contained information for each bid. The bid tab included information about how much money each company was willing to pay for each acre, the number of acres in the area, total amount of money for the lease per year, proposed royalty, maximum number of wellsites and the estimated land disturbance per well.

Terry Houston attended the meeting as a representative for LE Jones. Houston said the company was interested in leasing all of the properties, but on an all-or-nothing contingency.

The company’s overall bid per year was $38,996.10.

“Some are more desirable that the others,” Houston said.

Chesapeake’s two bids applied to Parcel 4. These bids were for $84,370 and $58,630. The commission members weren’t sure if the $58,630 was for one year or as a three-year lease contract.

The commission discussed having a special meeting later in the month to allow for clarification and to make a decision. It would also allow for Vaughn to talk with City Attorney Jim Frieda.

Members chose not to wait. Instead, they approved the $58,630 lease, if it is actually for a three-year period. If not, the $38,996 per year would be approved.

In other action, the board also approved hiring a concessionaire for Lake Humphreys. Dana Shea put in her application for the concession toward the end of September. At Tuesday’s meeting, board members had little discussion before approving her for the job.

“There’s a couple of things we like above the normal application,” Vaughn said. Shea has plans for selling pizza and running a gift shop in the concession. Both of these relate to jobs she has, including being a manager at a pizza restaurant and being self-employed at an antique store.

She said she also wanted to extend hours of operation to give people an option on what to eat late at night.

The board didn’t spend much time discussing or approving Shea for the position.

“We think there will be some added attractions,” Vaughn said.

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