TERRE HAUTE — By a 7-0 vote, the Vigo County School Board approved an agreement that will allow a company to do exploratory work and potentially drill for oil or gas under Lost Creek Elementary property.

If any oil or gas is found, the district would benefit financially through royalties, or a certain percentage of revenues.

Countrymark Energy Resources is an oil exploration and production subsidiary of CountryMark, which is based in Indianapolis and has a refinery in Mt. Vernon.

The agreement, an oil and gas license, allows the company to lease gas and oil mineral rights under the elementary school property, affecting about 28 acres.

Countrymark would “lease the rights to produce any oil that might be found under school property,” Richard Sumner, vice president of exploration for Countrymark Energy Resources, said in a telephone interview prior to the meeting.

If oil or gas is found, and depending on how much, “It could be a potential financial boon for the school district,” Superintendent Dan Tanoos said last week.

The school district would receive 28 percent of the gross proceeds, or “royalties,” off what is produced, according to the agreement approved by the board. Countrymark also will pay a certain “small amount” to do exploration, Tanoos said.

During a public comment period, Matt Effner, who has two children at Lost Creek, asked the board to postpone action so that parents would have more time to ask questions and learn more about what is proposed. He and other parents have concerns about potential safety issues and they “haven’t had much time to consider this.”

Tanoos said the Department of Natural Resources has strict permitting guidelines Countrymark must follow, which put his mind at ease about safety issues.

Also, the company would not have to go onto Lost Creek school property to drill. It would do horizontal drilling from other property where it already is drilling, so there wouldn’t be any tanks or any types of drilling devices on school property. He noted that Countrymark has agreements or is drilling on nearby properties.

The drilling under Lost Creek Elementary property would be about 1,500 feet underground and it would not affect the playground or school, Tanoos said.

The superintendent met with school staff Monday to talk about the potential drilling.

The company will first do background exploratory work, and Tanoos didn’t anticipate any drilling to occur before summer.

If the company does find oil or gas, and the school district does gain revenues, the School Board would then determine what do with the money generated, Tanoos said. “Through your vision, we’ll find the proper use for the money,” he said.

After the meeting, Effner said, “I’m disappointed they didn’t have more  discussion.”

CountryMark is one of the largest privately held companies in Indiana, Sumner said earlier in the day.

The drilling will not create any health or safety issues, Sumner said. If it posed any dangers, “We would not do this … and the state would not let us do it and the school district would not let us do it,” Sumner said.

On the other side of the coin, Sumner said, “People need to look at the benefit of potentially several thousand dollars a month revenue stream to the school district, especially at time of declining school revenues.”

If after 18 months no oil is found, the rights to drill under school property would expire, according to the agreement.