BP selloff means loss of royalties, corp. partnerships

May 27, 2014

WARREN, Ohio - Not much surprise came with BP's recent announcement that it would be moving its operations out of the Utica Shale Play in Trumbull County.

"I'm not really sad about it. I never thought the oil wells would pan out here," Paul Vitko Jr. of Vernon said.

Vitko, 64, leased the mineral rights on his about 1.25-acre property on Corinth Court without hesitation, since all of the farmers around him with large acreage were doing the same. Two wells were drilled about 2.5 miles in either direction of his home, but that activity in the area stayed quiet, he said.

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BP drilled six experimental wells in northern Trumbull County. However, only four are producing, and poorly at that, according to the Ohio Department of Natural Resources.

Last month horizontal drilling operator Halcon Resources, which has three Utica Shale wells producing in the county, also announced its departure from the area.

"Once Halcon left, it was just a matter of time," Vitko said.

Vitko received about $4,900 for his lease.

Dale Tayala, 76, split $24,000 from BP with the woman who owned the mineral rights on his property on Spencer Clark Road in Hartford. "I have no problem with them leaving, except they're not getting their money back," Tayala said.

He used the money from the lease on his about 6.3 acres to replace the roof on his home. Tayala said when he purchased his home about 30 years ago, the owner retained the mineral rights, but they opted to split the offer from BP rather than go through a lengthy court process for him to attain the full rights.

"Half of something is better that nothing, and if I didn't take it then, they probably wouldn't want it now," he said.

In retrospect, it was a wise decision, since BP is ready to begin marketing the mineral rights of the 85,000 acres it spent more than $300 million to lease in 2012.

"While BP regrets that it will not be participating more fully in the economic revival of northeast Ohio, the company remains very much a part of the state, where it has had a long history and continues to have a large presence," BP said in a statement.

Canfield-based Pecchia Communications had been supporting BP America through their public relations as the company explored the possibility of oil and gas development in the Mahoning Valley.

"BP will be missed," said Dan Pecchia, president of Pecchia Communications.

"The local and Houston leaders seemed genuine about doing all the right things here. They honored their commitments to landowners and seemed deeply interested in what local people thought of the company.

"They freed up sizable sums for local donations, and also sought out the best beneficiaries for those donations," Pecchia said.

Along with BP's departure will be a loss of a corporate partner that invested $100,000 in a STEM (science, technology, engineering and mathematics) program for Trumbull County students and provided smoke detectors through the fire chief's association.

"We started a community investment program even before we knew whether or not we could make any money from our wells because it was the right thing to do. We wanted to show that we were going to be a good neighbor and an active, caring part of the community," Curtis Thomas, BP Ohio spokesman, said.

"Despite the fact that the play didn't work out to fit our business portfolio, I hope we helped make the communities in which we contributed, better places to live, work and play.

"It was BP's honor to become a part of the fabric of those communities."



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