Bayer MaterialScience LLC announced an agreement to lease mineral rights at its New Martinsville Industrial Park for development of Marcellus Shale natural gas resources. Mineral rights on the Bayer-owned property have been leased to Houston-based Gastar Exploration, Ltd (Gastar).
Gastar will have full responsibility for drilling and related activities on approximately 1,400 gross acres of Bayer mineral property.* Construction and drilling are expected to begin later this year.
Bayer estimates the net present value of the future before-tax cash flows generated by this lease will total approximately $30 million over the next 30 years.
“We look forward to working with Gastar on this project and believe this agreement helps to strengthen the long-term viability of the New Martinsville Industrial Park,” said Jeffrey Bolton, general plant manager at the Bayer New Martinsville Industrial Park, Bayer MaterialScience LLC.
“We are pleased to add this block of Marcellus acreage to our portfolio and look forward to fully developing the Marcellus formation under Bayer’s property in a safe and responsible manner,” said J. Russell Porter, President and CEO of Gastar Exploration. “Along with our existing leasehold in this area of Marshall and Wetzel Counties, these leases help Gastar create a large, contiguous block of acreage that can be efficiently and profitably developed.”
Bayer’s New Martinsville Industrial Park totals approximately 1,000-acres. Bayer MaterialScience’s site within the park was founded in 1954 and is located on a 270-acre tract. It is the first U.S. urethanes plant and today produces more than 400 million pounds of chemical products annually. Major end-use products include: insulation, furniture, automobile seating and panels, coatings, and thermoplastic urethanes. There are approximately 300 employees currently working at the site.
*The approximate 1,400 gross acres include approximately 700 surface acres of the New Martinsville Industrial Park.