Gas wells OK’d at former water plant
December 3, 2012
EVANS CITY — Rex Energy will drill four Marcellus Shale natural gas wells at the former borough water plant. Council President Kim Armstrong said Rex officials came to the Nov. 19 borough meeting to discuss their plans with council, which voted to approve the measure. She said the wells will net the borough $20,500 in an up-front payment for the first well, plus 12.5 percent in royalties later. Borough solicitor Mike Gallagher said the borough will receive a payment of $5,000 from Rex Energy for each well that is erected at the water plant. The wells will be drilled in the rear of the water plant property, which is along Route 528 southwest of the borough. She said work will begin after Jan. 1. The borough signed a gas lease contract with Vista Energy four years ago, and Rex Energy has since bought that company and added four acres onto the leased property at the water plant. Evans City received a lump-sum payment of $13,000 in 2008 when the lease was signed with Vista. The borough will now receive an additional $8,300 for timber removal at the site of the wells, plus $12,250 for land disturbance, said Gallagher. Rex Energy will use the water in the old plant’s reservoir to hydrofracture, or “frack,” the wells after they are drilled. Armstrong said the wells will not affect borough residents or businesses, and Rex Energy did not say it would seek leases from nearby property owners. Council is waiting for state Department of Environmental Protection clearance to sell water from the former water plant to gas drillers for fracking purposes. That move should get the borough a new revenue stream. The borough switched to Pennsylvania American Water in February so homes or businesses no longer get their water from the plant.