Municipal authority reaches agreement with Hunt Marcellus

JOHNSONBURG – Through the course of several weeks of negotiations, the Johnsonburg Municipal Authority [JMA] has reached an agreement with Hunt Marcellus Operating Company, LLC, to sell treated water on an "as-needed" basis for use in its Marcellus Shale gas drilling operations.One of the obligations of the agreement Hunt has already fulfilled is to make a $500,000 capital contribution to the Johnsonburg Municipal Authority for the purpose of making capital improvements to their water supply system in order to make available 300,000 gallons of water per day by Aug. 1 to Hunt Marcellus."Many of their drilling sites are near our existing water lines, so we came up with the idea to, rather than them trucking the water to their drilling sites, we could actually pipe the water to their drilling sites through a temporary pipeline," said JMA chairman Eric Poague. "One is going to be near our Silver Creek Water Plant and the other one is going to be at the the intersection of Long Level Road and Silver Creek Road. It will actually be across the road at that site there, withdrawing water."Hunt Marcellus will also have the option on or before June 1, 2012, to make an additional capital contribution of $961,000 to the JMA."At that point, within 60 days we would bump them up to 500,000 gallons of water a day," Poague said. "They wanted to weigh and make that second capital contribution at a later point, only because they want to make sure they are successful on their initial drilling before they make that commitment for the second contribution of $961,000.According to Poague, the second contribution could be made between Jan. 1 to June 1, 2012.