Water sales to natural gas industry lead to increased revenue for local governments, reduced cost for customers
Chief Oil & Gas is one of several natural gas drillers in Pennsylvania who are helping to boost local government revenue by purchasing water from municipalities in the area.
In October 2010, Chief began purchasing water from the Borough of Montoursville. The Borough of Montoursville has had revenues of $423,000 from sales to oil and gas companies and expects to see revenues of $1.5 million this year for the sale of water for hydraulic fracturing. This revenue boost has led to a decrease in cost for consumers. Starting at the beginning of the next quarter, the cost to Borough of Montoursville customers for their water usage will be reduced by $1 per 1,000 gallons used.
Chief Oil & Gas recently obtained a consumptive use permit from the Susquehanna River Basin Commission that will allow the Altoona Water Authority to sell up to 250,000 gallons a day to Chief. The sale could result in several hundred thousand dollars in additional revenue for the Authority.
The Cambria Somerset Authority has also prepared a water sales agreement for Chief. Under CSA’s proposed agreement, Chief would automatically pay the authority at least $400 per month, which would allow for withdrawal of 50,000 gallons per month from any of the authority’s water holdings. As part of the agreement, additional water withdrawn over 50,000 gallons would be subject to a separate and additional price per-gallon rate.
Chief is committed to the responsible use of water to minimize pollution and waste, conserve natural resources and reduce the environmental impacts of its activities and operations.
About Chief Oil & Gas LLC
Based in Dallas, Texas, Chief Oil & Gas is a privately held, independent oil & gas company engaged in the exploration, development and production of oil and natural gas throughout the continental United States. For more information, visit chiefog.com.
kgittins (at) chiefog.com