Famous Buell well (Buell 8H) about to be shut down!!! Chesapeake doesn't own horizontal drilling rights!

Looks like Chesapeake's "best shale well ever" is actually owned by Kenneth Buell.

You can find all the relevant court documents (very hard to get your hands on - rural public records...) and analysis here:

And the Buell well will soon look like this.

p.s. the well is in Harrison County, Ohio.

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Permalink Reply by Buell Well on July 12, 2012 at 9:55am

I'm sure CHK is/has been exploring all of their options. What strikes me is that they haven't yet found a solution other than "continue bickering with Kenneth Buell/Sportsmen Club".

Permalink Reply by Dan on July 13, 2012 at 12:04am

If CHK bought the surface of some land within this alledged "5 square mile" area, or if they simply found a surface owner who was willing, they would have no one wanting to object to the horizontal drilling, would they?  Actually 5 square miles is not so big an area that you couldn't reach under it from the properties outside that area, so I don't really think this is going to become a huge issue, even if the ruling stands on appeal.

Permalink Reply by Dan on July 13, 2012 at 12:12am

Mr. Buell's mistrust or his anger at CHK are not going to be taken into consideration in court.  Only the facts of the case are.  Buell vs. CHK needs to be worked out, and it will be, but I just don't see it as the huge embarrassment and monumental problem that you do.

I don't think it is just coincidence that the Buell Well was the first well drilled in Harrison County and it just happened to be the best ever, and no wells drilled after that will ever match it.  It stands to reason that there will be plenty more like that one in the area.  Chesapeake is moving ahead with drilling other areas right now.  If this ruling stands, it just means they will have to be more strategic in placement of their wells.

Permalink Reply by Buell Well on July 13, 2012 at 4:37am

Somebody will have to be more strategic, whether CHK of a predecessor in interest. To be clear, that isnt a dig or an attempt at foreshadowing. Some people seem to think eastern Ohio or Harrison County's star is hitched to CHK's wagon and therefore anything that makes life easier for CHK should be passively accepted by landowners/mineral owners/judges/ODNR, etc. I would argue it's the other way around. Afterall, a French oil company came to eastern Ohio, the Ohio Valley didn't move to France. CHK can come or go, but if Harrison County has the goods then there's nothing to worry about.

Permalink Reply by Buell Well on July 13, 2012 at 4:46am

Dan you're confusing the legal proceedings with settlement negotiations. Sure, they often go hand-in-hand, and presumably that's true here. Nonetheless, they are distinct with different rules and different considerations.

Permalink Reply by Buell Well on July 12, 2012 at 9:17am

Dan:

Gloating is not helpful, but neither is naivete. (I don't think I've been gloating - why would I? - though I do feel good for Mr. Buell, who clearly seems to be the flagrantly aggrieved party here).

Now speaking realistically, CHK's well-document spate of bad PR only amplifies the light that will be shone on this story when Buell 8H gets shut down. If people are talking like this is big news - that's because it is. People don't mean to pile on, just learn, and perhaps also rubberneck some too.

"Meanwhile, 5 square miles really is just a tiny fraction of Chesapeake's leased acreage in this play.  Delaying their activities within that area doesn't slow down their overall operations at all.  They can and are drilling outside of that area right now."

I may have only mentioned this once: but some see this deed language as being "fairly common"! Unclear what that means, other than it goes beyond a very famous well and parts of it's immediate vicinity. That's not my claim, of course. That's according to (seemingly) unbiased legal analysis linked by the first place to post the court...The analysis comes from McDermott Will & Emery, who is not involved in this litigation, or any other oil and gas litigation in Ohio (as far as I know anyway). I've seen Steptoe & Johnson take a different take, but personally their way of looking at it seems fundamentally flawed.

Since this is a forum for news, developments, disucssion, and most importantly IMO, learning, I think we should take seriously the possibility that the Buell 8H litigation may have impacts beyond merely the 5 square miles around the Buell well.

Permalink Reply by Dan on July 13, 2012 at 12:19am

It remains to be seen how "fairly common" it really is.  If it is, then it will also have to be in contiguous areas of severed minerals a good bit larger than 5 square miles to cause real problems, because otherwise it would be possible to dodge those properties and drill under them from adjacent parcels that didn't have that restriction.  My guess is that finding that situation of large contiguous acreages of severed minerals with this restrictive deed language will not be fairly common.

Permalink Reply by Buell Well on July 13, 2012 at 3:56am

Who knows, maybe these are the only 5 square miles in eastern Ohio that have this deed language. If that's true, then it was quite a coincidence for CHK to pick precisely that piece of land to drill it's first well. Your guess may be right. Can't say anything for certain unless you have an encyclopedic reference of CHK's Utica title abstracts. 

Permalink Reply by Buell Well on July 12, 2012 at 9:46am

Dan:

"They [ODNR] look down upon force-pooling in general and are very restrictive of the practice. They do need to see a lease in place for every parcel in a unit before they will grant a permit. Of course they have no way of knowing if that lease is valid."

Presuming that at most only 1% of drilling involves force pooling, then in 99% of cases judges like Judge Nunner are the only source of redress where mineral/landowners rights have been violated, whether because there was no lease, or it had expired/wasnt valid, or the company was simply operating in a way that violated the terms of the lease.

Like 99% of cases, Buell/Jewett does not involve force-pooling. Force-pooling at least would have been legal. Ripping up a counter-offer, trespassing, bulldozing, and making threats when property owners protest was not legal. Judge Nunner said so, and I say thank god for that. 

Permalink Reply by Frank Nesmith on July 14, 2012 at 3:59am

Any new word on when Judge Nunner is expected to rule?

Permalink Reply by Buell Well on July 15, 2012 at 7:03am

No.

Permalink Reply by Buell Well on July 16, 2012 at 4:28am

To reply to those who think the courts are not important to protecting mineral owner rights: attached is the Buell well permit application from ODRN's website. Note: despite the length of the permit, the producer does not have to provide a copy of an oil and gas lease where the pad is drilled, let alone for every parcel in the unit. There is not even a Page/Volume reference that could be used to look up the alleged lease. You see, ODNR does not confirm the producer is a valid lessee for all parcels or that their permit conforms to the terms of the leases in the unit. In other words, if you're expecting ODNR to protect your property rights, you're fooling yourself.

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