PPG Industries has announced that it has reached an agreement to lease property for development of Marcellus Shale natural gas resources at the company’s Natrium, W.Va., chemicals site.
Drilling rights on the PPG-owned property have been leased to Houston-based Gastar Exploration, Ltd. Gastar will have full responsibility for drilling and related activities on PPG property. More than 30 wells are planned, with construction and drilling activities expected to begin in the third quarter of this year. Personnel in Gastar’s northeast regional office in Clarksburg, W.Va., will manage its operations on the PPG property, and Gastar expects to hire additional personnel in the region to support on-site operations. PPG estimates the net present value of the future before-tax cash flows generated by this lease will total approximately US$ 50 million over the life of the anticipated well development, which is estimated to be over 30 years. This includes an initial cash payment of approximately US$ 10 million.
“When developed responsibly, Marcellus Shale resources represent a fantastic opportunity in our region to promote jobs and secure an abundant source of U.S.-based energy for our homes and our businesses,” said Michael H. McGarry, PPG senior vice president, Commodity Chemicals. “We are pleased to be working with Gastar Exploration on this exciting project and believe that this development continues to demonstrate PPG’s commitment to the long-term sustainability of our Natrium plant.”