ZANESVILLE -- As the buzz surrounding the Utica and Marcellus shale formations increases, local landowners are positioning themselves to get the most money for their land.

Some are joining to push drilling companies for better deals. Others already have sold or leased their land. Still others are holding out, either for a better price or more information on the drilling process.

Dale Arnold, Ohio Farm Bureau Federation director of energy services, has seen natural gas booms before. This time, however, the technology is bigger -- some drill sites will occupy 6 to 10 acres, he said -- and the payouts are better.

"Energy prices are basically going up. And this is not a fad. This is long-term," Arnold said. "You're hearing a lot about bonus payments, several thousand dollars an acre. Is it true? Yes, it is."

Sold

This past week, online bidders duked it out for 95 acres of land in Mount Perry. Kaufman Reality & Auctions, based in Sugarcreek, sold the land itself separate from the oil and gas rights, but the same bidder bought them both for a combined $382,000.

In December in Morgan County, 53 acres of farmland sold to several bidders for a combined $108,000. The oil and gas rights to the same 53 acres went for $165,000.

Kaufman started doing such sales in mid-2011, partner Jason Miller said. In the third quarter of 2011, the company built a separate Minerals and Natural Resources website section.

"This has been a natural transition. We're not going away from the land; we're just adding a new interest," Miller said. "We just kind of morphed into the oil and gas interest because it's part of the land."

The Ohio Department of Natural Resources' Division of Oil and Gas Resources Management already has issued four well permits for Muskingum County. All are in Meigs Township, issued to a Texas-based company called Anadarko Petroleum Corp. Drilling hasn't started yet, but Anadarko has started constructing the base of at least two sites, township trustee Stephen Bradley said.

Bradley has about 7 acres he would be willing to lease if the opportunity arose, he said.

"If they're gonna drill and they're gonna pay anywhere from three to 5,000 (dollars) an acre, yeah, I'd be interested," he said. "I don't know why anybody wouldn't."

Band of sellers

Rather than face the leasing battle alone, some are banding together into landowner groups. In September, local law firm Graham & Graham Co., L.P.A., started the Muskingum Valley Landowners Group. Already, the group consists of about 300 landowners willing to lease a combined 22,000 acres for drilling, said Stephen McCann, an attorney with the firm. The majority of those landowners are from Muskingum County, but several are from Coshocton, Morgan, Perry and Licking counties as well, McCann said.

Graham & Graham's goal is to lease the combined acreage to one company at a higher price per acre than each of the landowners could have negotiated individually, McCann said. The minimum the group will lease for is a $3,500 per acre bonus plus a 16 percent royalty on drilling profits.

"We believe the landowner gets the best lease, best terms, through a land group," he said. "The most important thing is to have a landowner-friendly lease."

Graham & Graham -- partnering with Pennsylvania law firm Morascyzk & Polochak -- hopes to have a lease signed by April, McCann said. The attorney fee, 7.5 percent of the signing bonus plus and royalties, is contingent upon a lease.

"All in all, this is going to be very beneficial to southeast Ohio," McCann said. "We think it's all a positive thing."

Logistics of leasing

In the 20th century, top dollar for an oil-rights lease was $30 per acre. Now, some farmers are seeing signing bonuses of up to $5,000 per acre, Arnold said. The money is coupled with a more complicated leasing process, however. The answers are there, Arnold said -- landowners just need to know what to ask.

"Farmers need to have good legal counsel and need to ask some serious questions and really need to sit down and plan," he said. "A lot of farmers are on the learning curve or the education curve. They're finding out what's going on."

For some, the oil and gas rights might not even be theirs to sell. Their grandparents or great-grandparents or great-great-grandparents might have leased the rights to an oil company years ago, Arnold said. And while there might not have been any drilling for a long time -- and the oil company might not even be around anymore -- the lease still is binding, Arnold said.

"Unless a legal action has been done on that lease, it is still good," he said.

Once landowners clear their land records, Ohio law sets up pretty good minimum standards to get them 80 percent of the way to a good lease, Arnold said. After that, it's up to them to go the final 20 percent to make sure they and their land are protected.

Recently in Dresden, about 300 potential lessors crammed into the St. Ann Parish on Chesnut Street to hear Arnold's presentation on leasing. Arnold's biggest message for landowners: "Anything is negotiable." The leases are long-term, multi-generational, so people need to make sure they're getting a solid deal that will not only benefit them now but also their children, grandchildren and great-grandchildren, he said.

"Take your time. You don't have to sign something right now," he said.

The choice to lease

As excitement about shale increases, so does worry, said Kari Burkey, farm bureau organization director for Muskingum, Perry, Morgan and Washington counties. Because the drilling companies are using relatively new technology, there are a lot of unknowns, she said -- everybody wants the best deal they can get, but people also are worried about doing something wrong.

"It's definitely heating up a little bit, and people are getting excited," Burkey said. "I think a lot of them are excited or concerned or maybe both just because of the unknowns."

Muskingum County resident Ron Wilson, for example, still is on the fence about leasing. He has about 120 acres of land in the Utica formation, but he wants more information before he decides one way or the other.

"I like where I live and the way it is now," said Wilson, whose main concern is making sure his property will be protected during drilling and restored afterward.

For Pat Burkhart, there are environmental concerns in the back of his mind. But Burkhart thinks the drilling technology is good, and he'll probably end up leasing his 100 Zanesville acres if the right deal comes along.

Especially controversial lately has been the drilling technique known as hydraulic fracturing, or fracking, in which highly pressurized liquid is injected into rock formations to draw out natural gas or oil.

In Youngstown, a series of 11 earthquakes between March and the end of December are being blamed on an injection well in the area. However, the Youngstown well differs from a drilling well in which fracking could be employed.

In Coshocton County, Buckeye Brine LLC is constructing two brine injection wells near Airport Road and U.S. 36. Company President Steve Mobley said a drilling rig is being established, with construction of surface facilities such as tanks, pumps and truck bays to follow. Plans are for the wells to be operational by May.

Mobley and Ohio Petroleum Council Executive Director Terry Fleming said there has been no evidence to date to connect brine injection with earthquakes.

"There are over 150,000 oil field injection wells in the United States that have never been involved in any kind of investigation of a seismic incident, so I don't know what they think might be different about the one in Youngstown," Mobley said.

However, Matt Trokan, conservation coordinator with the Ohio Chapter of the Sierra Club, said the organization is concerned about the possibility of a connection with brine injection wells and earthquakes and also any pollution to the local environment.

Trucking of waste fluids and other materials is another concern locals should have about fracking, Trokan said. Spills can happen and truck traffic can affect quality of bridges and roads, he said.

"You really have to ask for your community -- the risks are known, so what are the benefits?" he said.

For some residents, however, the decision is made, and it's not whether they'll lease their land but when. Dave Merker and his family have about 450 acres between Dresden and Frazeysburg, and Merker is confident they'll sign over the oil and gas rights eventually.

"We feel it's going to happen sooner or later, so we're trying to get educated," he said. "We want to do this right for our grandkids and kids."

Merker's family has been through the leasing process in the past with previous rock formations, but this time the technology is bigger and much more complicated, he said. He wants to make sure not only that the payback is good but that the land also is protected.

The Merkers already have been approached by one company, but they turned down the offer, Merker said. It was an "unrealistic lease" -- all about the company with no consideration or benefits for the family.

It's only a matter of time, however, before someone else offers a better deal, he said, one he and his family will be happy to sign.

"The need is there, and it's not going to go away," he said. "We have resources to share."