Indian Springs Metropark
Oil and Gas Exploration
Project Summary / Current Status
January, 2013

The Huron-Clinton Metroparks entered into an oil and gas lease with the firm of Jordan Development Inc. Michigan, to explore for oil and/or gas within the 2,510 - acre Indian Springs Metropark. A Part 1 Lease (for 375 acres) was approved on September 8, 2011, and a Part 2 Lease (2,135 acres, covering the remainder of the park) was approved on October 11, 2012.

The exploration, development and production of oil and gas is regulated by the Michigan Department of Environmental Quality, Office of Oil, Gas and Minerals.

Jordan Development Inc., of Traverse City, is an independent oil and gas exploration firm partnering on this project with the firm of West Bay Exploration, Inc., also an independent exploration firm. These firms are highly responsible and qualified, and they have been responsive to the Metroparks’ concerns throughout the project. Jordan and West Bay have recently been active in securing oil and gas leases from landowners in Springfield Township and surrounding communities.

The first well drilled under the lease is located near the northeast corner of White Lake and Teggerdine roads. Well drilling operations began in mid-summer, 2012 and concluded in late fall. The well is currently being tested and evaluated.

A second well site is now under development (as of mid- January, 2013), located in the northeast area of the park, near the intersection of Hillsborough and Hillman roads. The anticipated well development sequence will be:

Complete the access road off Hillsborough and well pad, and move in the drilling rig:  early February

- Drill well:  Two to three weeks duration, through February, possibly into March. A temporary, conventional well drilling rig is used.

- Complete the well:  Two to three weeks, possibly through March. Work will involve a smaller service rig.

- Additional drilling/completion work may be necessary afterward, depending on results of the initial drilling. Also, the schedule may vary depending on frost laws, weather conditions and unforeseen issues.

- During site construction operations, construction equipment and workers may be seen accessing the site, typically during daytime hours. During well drilling operations, a lighted drill rig will be visible and its sounds will be audible to those located in the immediate area. Well drilling operations will take place typically round-the-clock during primary drilling activities.

- After well completion (if the well is productive), only a wellhead, associated equipment and the fencing around the site will remain, along with the gravel access drive and site pad.  Production facilities (tankage, etc.) will be located elsewhere, off the project site.
 
The Metroparks’ key considerations in entering into oil and gas leases are:

Environmental: Protect Metropark property, minimize impact to recreational uses and the environment, and be considerate of neighboring property owners and local communities to the greatest extent possible.
 
Economic: Maximize the economic potential for oil and gas development to the Metroparks.

Developer Qualification: Work with reputable developers, in terms of their ability to protect the environment, to avoid impact to recreational uses, to maximize economic return, to conduct operations safely and cooperatively, and to comply with the terms of the lease.

Control: Retain control over the developer’s activities through the development and enforcement of strong lease provisions, and through proactive oversight of the lease and the exploration process.

Under the Indian Springs Metropark lease, Jordan Development has limited access within the park for well development, and wellhead locations are restricted to only non-environmentally sensitive, non-recreational use locations within Indian Springs. Also, high-volume hydraulic fracturing (“fracking”) is not permitted under the lease.

The Metroparks has had 20 years of experience with oil and gas development. Since 1992, the Metroparks has approved five oil and gas leases with the firm of West Bay Exploration covering a total of 1,056 acres in Kensington Metropark. West Bay has developed five wells, four located within Kensington and one outside the park. These projects have had minimal impact on environmental or recreational values within the park.

In accordance with the Board of Commissioner’s Resolution of February 10, 1994, oil and gas royalties are deposited in the Authority’s Supplemental Major Maintenance Reserve (SMMR) Fund. The SMMR Fund is dedicated to major maintenance, reconstruction, redevelopment and replacement of essential park infrastructure, for projects whose combined total estimated cost exceeds $200,000. These are projects that would otherwise be difficult to fund through the Authority’s general fund without significantly impacting other areas of the budget. HCMA’s oil and gas leases, and the SMMR Fund they support, have produced approximately $13 million in revenues since 1993.

Landowners seeking additional information regarding oil and gas leasing, and other issues related to oil and natural gas exploration, are directed to the MSU Extension Service’s Oil and Gas Portal, located at:

http://msue.anr.msu.edu/program/info/oil_and_gas

For more information, please feel free to contact:

Michael Arens, P.E.
Huron-Clinton Metropolitan Authority
810-494-6045
mike.arens@metroparks.com