Gas companies find their home in Lewis County

By George Hohmann
Charleston Daily Mail

JANE LEW July 25, 2008 02:02 am

— Mike John grew up in Lewis County, a mostly rural place. “It makes me smile to think of someone calling that area a hub,” he said.
But that’s exactly what Lewis County and, in particular, Jane Lew, have become: A hub for north central West Virginia’s natural gas industry.
No fewer than 11 natural gas operators and service companies have settled in at the Jane Lew exit of Interstate 79. There are others at nearby Weston, and still more from Anmoore and Bridgeport to the north to Buckhannon to the east.
“I attribute the attractiveness to the four-lane highways in the area,” said John, who is vice president of operations for Chesapeake Appalachia, the eastern division of Chesapeake Energy. “You’ve got U.S. Route 33 (also known as Corridor H) that takes off from I-79 at Weston and goes east for quite a distance. You’ve got Route 50, a four-lane west to the Ohio River. And you can get on Interstates 68 and 70. I guess ‘hub’ is a pretty good word when you think of the highway structure in that area. I think that’s what largely caused the industry to congregate in Jane Lew.”
In May, Gov. Joe Manchin, Chesapeake co-founder Aubrey McClendon and John were among the dignitaries on hand for the dedication of Chesapeake’s field office, which sits on a hill overlooking the Jane Lew exit.
Scott Nease, Chesapeake production superintendent, said that before the Jane Lew office opened, the company had three offices in two locations at Buckhannon. The locations were a couple of miles apart.
“With e-mail and phones you were connected but it really is great now,” he said. “When something hits your mind, you can go down the hall - it’s really good to get everybody in one place.”
Seventy-five employees work out of the office, maintaining about 1,250 existing wells and the infrastructure that goes with them. Their territory is comprised of nearly one million acres of mineral leases that range from eastern Ohio to Maryland and from the middle of Pennsylvania south to Calhoun County. The field office currently has one drilling rig with expectations of more to come.
Chesapeake is the latest to put down roots at Jane Lew. Many of the natural gas-related companies in Jane Lew are clustered on the other side of the Interstate, in the Lewis County Industrial Park. That wasn’t always the case. Ben Hardesty remembers when the park was almost empty. In 1985 the company he headed, Stonewall Gas Co., moved 15 employees into 3,000 square feet of space in the park.
“Ben’s been there from the beginning,” said John. “He was at it when no one else was. He’s been in a unique position - to watch it all unfold from his office window.”
Hardesty, a Shinnston native (and brother of retired West Virginia University President David Hardesty), said he was attracted by Jane Lew’s central location, the fact land was available with utilities, and the helpfulness of local leaders.
Stonewall Gas had grown to about 45 employees when it was acquired in 1995 by Dominion, the big Richmond, Va.,-based energy company.Today Dominion Exploration and Production Inc., which Hardesty heads, has 120 full-time employees plus eight summer interns. Hardesty said that on any given day there also are 300 to 400 contractors working for the company - “folks building or reclaiming locations, surveyors, people operating drilling rigs.” In addition, thousands of landowners get royalty checks. “This business has a large, positive impact on the economy,” he said.
Dominion E&P operates more than 5,000 wells in West Virginia. The company plans to drill more than 250 wells in the state this year.
Last October, Dominion announced it was moving about 50 jobs from Houston to Jane Lew. “We’re hiring a lot of local people for finance, accounting and land administration,” Hardesty said in a recent interview.
Hardesty thinks there’s truth to the theory that when several companies in a particular industry locate in an area, others are attracted to locate nearby.
John agreed. For operators like Chesapeake and Dominion, “it’s more about where your wells and acreage are located,” he said. But for companies like Halliburton and Schlumberger - companies that provide materials, compressors, tanks, trucking and other services - “they don’t want to disadvantage themselves by being further away from their competition. A lot of attention is paid to where others are located.”
John said some of the biggest companies in the business have begun showing up in Jane Lew. One is XTO Energy. On July 1 the Fort Worth, Texas-based company completed the purchase of Linn Energy’s oil and gas properties in the Appalachian Basin for $600 million. Linn’s Jane Lew office is a stone throw from Dominion E&P’s headquarters.
During the dedication of Chesapeake’s Jane Lew field office in May, Aubrey McClendon, Chesapeake’s chief executive officer and co-founder said, “North central West Virginia is thriving: real estate agents tell us while a housing downturn is evident in other parts of the country, Lewis County is doing great because of the activity in the natural gas sector and the retail and service industries that come with it. The unemployment rate also helps tell the story.”
Lewis County’s unemployment rate was 5 percent in June, as compared to the state rate of 5.5 percent. Workforce West Virginia, formerly known as the state Bureau of Employment Programs, estimated that an average of 550 people were working in natural resources industries in the county last year.
Michael Hines Jr., an employee of Dominion who is president of the Lewis County Chamber of Commerce, said, “While the rest of the nation is slogging through a tough economic climate, north central West Virginia seems to be shrugging it off.”
Hines said the Lewis County Industrial Park - nearly empty when Hardesty located his company there 23 years ago - is now essentially full. A local entrepreneur recently purchased 25 adjoining acres with the intention of developing it to expand the park.
“Once the land is developed, the common perception is that he will have no problem signing up tenants,” Hines said.

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