Replies to This Discussion

Permalink Reply by Dan on November 15, 2011 at 11:51am

Does anyone know if there are any Ohio regulations that elaborate on the rights that a surface owner has when a producer wants to come and disrupt the surface to extract the minerals and there is no written agreement in effect?  If there is nothing specific, then common law would come into effect where the producer must reasonably compensate the owner for damages, and take reasonable care to only disturb that which is necessary to extract the minerals.  Since that "reasonableness" is most likely considered differently by each party, an agreement would need to be signed, or else a court would decide.  Does anyone know what kind of damages that the Sportsman Club is getting, or being offered?  I have a feeling that this is going to set some precedant for similar situations in the future.

Permalink Reply by Philip Brutz on November 15, 2011 at 12:09pm

They were offered $15,000

http://webcache.googleusercontent.com/search?q=cache:ijs_lMPi-ZMJ:w...

Permalink Reply by AT on November 15, 2011 at 1:18pm

It would be interesting to know whether or not the mineral rights owner in this situation included the right to "ingress and egress" or the "right to extract said gas & oil" in the reservation of the oil and gas rights. If not, I don't see why the Sportsman Club, as surface rights property owners, couldn't just call the sheriff, file a trespassing report and let the sheriff remove them from their property? I'm sure the club had signs posted on their property. If this language, or similar language, was made in the reservation, I don't think the club has a leg to stand on. 

 

I'm also not sure how CHK thinks they have any right or authority to "fine" anyone. I don't believe they are the law. Sounds more like a scare tactic or "bullying" to me.

 

By the way, I took a ride past the site on Sunday and they were working on site preparation "full bore". I must have seen 20-30 new "KEEP OUT" and "NO TRESPASSING" signs plastered all over that area to the point of it being overbearing. If that was the work of CHK, it comes across as a little obnoxious and definitely unfriendly.

Permalink Reply by Dan on November 15, 2011 at 11:53am

That's an interesting idea Finnbear.  Maybe in the future some kind of legislation could be passed to that effect, but of course that only makes sense with horizontal drilling.  In years past the only way to get to the minerals was to drill down from right above.

Permalink Reply by Finnbear on November 15, 2011 at 12:31pm

Not necessarily so on this being applicable to horizontal wells only. It is possible to slant drill a vertical well to hit a target that is not directly beneath the well pad and could be under an adjacent property.

Permalink Reply by Dan on November 15, 2011 at 3:51pm

I suppose you're right, although I guess what I really meant to say was that it only makes sense with directional drilling. Prior to directional drilling and telemetry technology you just aimed the bit straight down and that was it, I suppose.  I wonder how far laterally from the entry point you can go before it is technically considered horizontal drilling...

One problem with your idea though is that anyone who wanted a no-drill lease could just sever their mineral rights from the surface before signing a lease, which would make it much more difficult for drillers to place pads and develop units.

Permalink Reply by JT on November 15, 2011 at 11:46am

According to this site it appears that mineral rights trump surface rights if the lease isn't specific....

 

Q.  What rights do I have as surface owner if someone else owns the minerals?

A.  The lease agreement defines the conditions that apply between the company and the mineral interest owner. Any other conditions relative to surface activity (i.e., location approval of wells, roads, tanks, damages, etc.) also have to be declared in the lease. Unless specifically declared otherwise, the interest of the mineral owner takes precedence over the surface occupant in cases of mineral severance.

http://www.oogeep.org/LandownerInformation/generalleasinginformatio...

 

 

Permalink Reply by Finnbear on November 15, 2011 at 11:49am

In other words, buyer beware if the property in question is not whole with the mineral interest included.

Permalink Reply by 1s7k1qp9wk1t7 on November 18, 2011 at 6:54am

message to chesapeake....why battle with the jewett sportsman club about putting in a well pad when you can put one on the 185 acres you leased a little over a mile north of the club.....plus our rights give us full rights of ingress and egress.....lets start drilling!!!

Permalink Reply by Al Cramblett on December 24, 2011 at 4:10pm

CADIZ, Ohio -     

Chesapeake Energy and  the Jewett Sportsman's Club were in a Harrison County Courtroom arguing over drilling rights Wednesday (December 21).

At issue is whether Chesapeake has the right to enter the Sportsman's Club property and begin drilling.

The two sides are trying to come to a resolution . Some of Wednesday's testimony was based on a deed that was drafted in 1959.

The Sportsman's Club argues that any rights to purchase service rights expired in the late 1970's.

They revealed Wednesday that during the time WB Coal came onto the property and paid them royalty fees totaling 35 cents for each ton of coal that was taken off the property.

Sportsman Club officials even submitted leases from that time as evidence . They argue now that Chesapeake should also make an offer to use the property.

Sportsman's Club President John Harris was the first to testify.

Harrison County Common Pleas Court Judge Michael Nunner has asked both sides to submit all information in the case by Friday at noon.

The judge is expected to rule sometime after he has reviewed the information.

Permalink Reply by Dan on December 26, 2011 at 3:31am

Meanwhile, the judge in the case has issued a temporary restraining order on Chesapeake so they are not allowed to do anything to impact surface water or timber while they try to resolve this.  The judge said, "The court also recognizes that defendants could suffer serious economic injury if they are restrained from continuing activities they have commenced on the premises ... The public is also interested in being assured that the rights of any person, group or corporate entity will be determined by the process of law rather than by the size of equipment or depth of economic resources ... In the circumstances of this case, this public interest outweighs all of the factors."

WTRF - 7 News, December 15, 2011 - Chesapeake Energy Told To Stop A...

Herald Star, December 22, 2011 - Sportsman club gets temporary bid ...

Apparently Chesapeake is up to $54,000 on its offer to the club to compensate for surface damage, with the agreement not including any restrictions on the location or the size of acreage they can affect with their activities, which the club says they want.

This does seem to be a precedent-setting case. I'm still puzzled why Chesapeake is choosing to fight this battle now at this early stage, when there are countless folks out there who would welcome them to come drill on their land right now.  It could be that the mineral owner, North American Coal Royalty Company, is pushing Chesapeake on this one more than anything, because they want the rights to those minerals.  But couldn't they just find a different pad site, and just take the gas out from under the club horizontally?  There must be something else going on, because it just seems like they are making this harder than they need to be.

Permalink Reply by craig on December 26, 2011 at 8:47am

CHK appears to enjoy making things harder than they need to be. Look at marko's threads here at GMS about how they are conducting themselves with him.   Someday CHK will realize they aren't in Oklahoma anymore, hopefully sooner than later for all involved.

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